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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 difficulty of deciding when a business transaction should be recorded






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






4. International Accounting Standards Board.






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






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






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






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






9. 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)






10. People that estimate various things






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






12. Deferral of an expense! (Except land)






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






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






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






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






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






18. Contributed Capital + Retained Earnings

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19. Decreases






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






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






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

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23. 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.






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






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






26. Contains only balance sheet accounts.






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






28. 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






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






30. Revenues - Expenses






31. As an expense and the corresponding liability accumulate.






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






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






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






35. 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.






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






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






38. Decreases






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






40. 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






41. A net loss occurs






42. Accounting periods of less than a year.






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






44. Increases






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






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






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






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






49. Postponement of recognition of an expense already paid.






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