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CLEP Financial Accounting

Subjects : clep, business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. People that estimate various things






2. When an entity sends out a product to a distributor and takes a certain percentage for what they sell it for (Usually occurs when they have excess inventory)






3. The net amount - or 'Book Value' of an asset






4. Revenues - Expenses






5. A separate account that is paired with a related account






6. The amount allocated to any one accounting period.






7. Generally Accepted Accounting Principles - or guidelines for financial accounting.






8. The difficulty of deciding when a business transaction should be recorded






9. As an expense and the corresponding liability accumulate.






10. Deals with all techniques accountants use to apply the matching rule: Recording revenue when they are earned - Recording expenses when they are incurred - More closely related to profitability - Adjusting the accounts






11. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.






12. Revenue that a company has earned for providing a service but for which it has not billed or been paid by the end of the accounting period.






13. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account






14. Selling goods and services to customers - employing managers and workers.






15. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely






16. Accounting periods of less than a year.






17. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.






18. Used to accumulate the depreciation on each long-term asset






19. Contains only balance sheet accounts.






20. The predetermined time at which a transaction should be recorded.






21. It's usual balance and is the side (debit or credit) that increases the amount.






22. Cash account






23. Increases






24. Shows the changes in RE over an accounting period.






25. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period






26. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured






27. Lists all accounts and their balances






28. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.






29. Determines that all temporary accounts have zero balances and to double check that total debits = total credits






30. The practice of recording transactions at exchange price at the point of recognition.






31. Summarizes revenues earned and expenses incurred by a business over an accounting period. (Shows whether a business achieved its profitability goal)...Revenues - Expenses - Income taxes






32. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely






33. Net income on the income statement - and profitability comparisons from one accounting period to the next.






34. Customer buys a service - company pays an employee for service - company performs service






35. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.






36. Sole worker of your business






37. A temporary account that summarizes all revenues and expenses for the period.






38. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.






39. Match expenses with the revenues that they help generate - & vice versa.






40. Payments of rent - insurance - supplies - and the depreciation of plant and equipment






41. Contributed Capital + Retained Earnings

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42. A 12 month accounting period (Vary depending on slack seasons)






43. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.






44. The ability to have enough cash to pay debts when they are due.






45. Postponement of recognition of an expense already paid.






46. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.






47. Revenues that a company has earned but for which no entry has been made in the accounting records






48. Their related asset accounts on the balance sheet






49. Made at the end of accounting period..-They clear revenue - expense accounts - and dividends account of their balances. -Summarize a period's revenue and expenses by transferring the balances of them to the income summary account






50. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.