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






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






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






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






5. The amount allocated to any one accounting period.






6. People that estimate various things






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






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






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






10. International Accounting Standards Board.






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






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






13. Revenues - Expenses






14. Working totals






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






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






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






19. 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






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






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






22. Choosing the number of accounting periods






23. Increases






24. 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.






25. Decreases






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






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






28. Accounting periods of less than a year.






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






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

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






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






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






34. A net loss occurs






35. Deferral of an expense! (Except land)






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






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






38. Decreases






39. Sole worker of your business






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






41. Accounting Equation






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






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






44. 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)






45. 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.






46. As an expense and the corresponding liability accumulate.






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






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

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






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