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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. Increases






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






3. Contains only balance sheet accounts.






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






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






6. Cash account






7. International Accounting Standards Board.






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






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






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

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






12. Accounting periods of less than a year.






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






14. 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.






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






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






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

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18. 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






19. Choosing the number of accounting periods






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






21. 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)






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






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






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






25. The estimation of business's net income in terms of accounting periods.






26. Sole worker of your business






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






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






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






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






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






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






33. The amount allocated to any one accounting period.






34. Lists all accounts and their balances






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






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






37. A net loss occurs






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






39. Decreases






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






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






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






43. As an expense and the corresponding liability accumulate.






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






45. 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






46. Contributed Capital + Retained Earnings

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






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






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






50. Decreases