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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. Sole worker of your business






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






3. Working totals






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






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






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






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






8. Contributed Capital + Retained Earnings

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9. 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






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






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






12. Decreases






13. International Accounting Standards Board.






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






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






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






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. A net loss occurs






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






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






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






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






23. Lists all accounts and their balances






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






25. 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.






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






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






28. Cash account






29. Deferral of an expense! (Except land)






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






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

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






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






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






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






36. 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)






37. Contains only balance sheet accounts.






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






39. Postponement of recognition of an expense already paid.






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






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






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






43. As an expense and the corresponding liability accumulate.






44. 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.






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

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46. The amount allocated to any one accounting period.






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






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






49. Revenues - Expenses






50. Accounting Equation