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






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

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






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






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






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






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






8. Deferral of an expense! (Except land)






9. Postponement of recognition of an expense already paid.






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






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






12. The amount allocated to any one accounting period.






13. Revenues - Expenses






14. Accounting Equation






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






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






17. A net loss occurs






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

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19. 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






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






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






22. As an expense and the corresponding liability accumulate.






23. Decreases






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






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






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






27. Accounting periods of less than a year.






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






29. Choosing the number of accounting periods






30. 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.






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






32. Decreases






33. People that estimate various things






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






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






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






37. Contains only balance sheet accounts.






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






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






40. Working totals






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






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






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






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






45. Increases






46. 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.






47. 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






48. Contributed Capital + Retained Earnings

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






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