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






3. Choosing the number of accounting periods






4. Their related asset accounts on the balance sheet






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






6. 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






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






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






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






10. Contributed Capital + Retained Earnings

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11. Increases






12. As an expense and the corresponding liability accumulate.






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






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






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






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






17. Cash account






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






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






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






21. Revenues - Expenses






22. Sole worker of your business






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






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






25. People that estimate various things






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






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






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






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






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






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






32. Accounting periods of less than a year.






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






34. Working totals






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






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






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






38. Decreases






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






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. The amount allocated to any one accounting period.






42. Decreases






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






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






45. Postponement of recognition of an expense already paid.






46. 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)






47. Contains only balance sheet accounts.






48. Accounting Equation






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






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