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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. 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






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






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






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






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






6. Their related asset accounts on the balance sheet






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






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






9. As an expense and the corresponding liability accumulate.






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






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






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






13. The amount allocated to any one accounting period.






14. Decreases






15. Accounting for revenues in the period in which cash is received and for expenses in the period where cash is paid. More closely related to the goal of liquidity.






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






17. 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






18. 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.






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






20. Decreases






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






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






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






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






25. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future






26. Cash account






27. Choosing the number of accounting periods






28. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.






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






30. Accounting periods of less than a year.






31. The manipulation of revenues and expenses to achieve a specific outcome.






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






33. Working totals






34. A net loss occurs






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






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






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






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






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






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






41. Determines corporate policy - declares dividends and appoints management.






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






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






44. Payments received in advance - and deposits made on goods and services






45. If you're having a bad year - to dump everything into something else like pensions

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






47. Increases






48. Lists all accounts and their balances






49. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.






50. Contributed Capital + Retained Earnings

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