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






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






3. Revenues - Expenses






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






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






6. Working totals






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

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






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






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






11. Accounting periods of less than a year.






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






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






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






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






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






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






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






19. Deferral of an expense! (Except land)






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






21. Choosing the number of accounting periods






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






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






24. As an expense and the corresponding liability accumulate.






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






26. 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






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






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






29. Increases






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






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






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






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






34. International Accounting Standards Board.






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






36. The amount allocated to any one accounting period.






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






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






39. Their related asset accounts on the balance sheet






40. Decreases






41. People that estimate various things






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






43. 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






44. 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.






45. 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)






46. Cash account






47. Accounting Equation






48. Contributed Capital + Retained Earnings

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






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