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






2. 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






3. Decreases






4. Contains only balance sheet accounts.






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






6. Increases






7. 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.






8. A net loss occurs






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






10. As an expense and the corresponding liability accumulate.






11. 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






12. Choosing the number of accounting periods






13. Revenues - Expenses






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






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






16. Deferral of an expense! (Except land)






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






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






19. 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)






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

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






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






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






25. Lists all accounts and their balances






26. Contributed Capital + Retained Earnings

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






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






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






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






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






32. The amount allocated to any one accounting period.






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






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






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






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






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






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

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39. Cash account






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






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






42. Their related asset accounts on the balance sheet






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






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






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






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






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






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






49. Postponement of recognition of an expense already paid.






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