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






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






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






4. Contributed Capital + Retained Earnings

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5. Revenues - Expenses






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






7. 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






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






9. Sole worker of your business






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






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






12. As an expense and the corresponding liability accumulate.






13. 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.






14. Postponement of recognition of an expense already paid.






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






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






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






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






19. Decreases






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






21. A net loss occurs






22. Decreases






23. The amount allocated to any one accounting period.






24. International Accounting Standards Board.






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






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






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






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






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






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






31. The estimation of business's net income in terms of accounting periods.






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






33. Accounting periods of less than a year.






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






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

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36. 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.






37. 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)






38. Common Stock + Retained Earnings - Dividends + Revenues - Expenses

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39. Accounting Equation






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






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






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






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






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






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






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






47. Choosing the number of accounting periods






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






49. Working totals






50. Cash account