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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. Contains only balance sheet accounts.






2. Cash account






3. 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.






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






5. 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






6. 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.






7. 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)






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






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






10. People that estimate various things






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






12. A net loss occurs






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






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






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






16. Working totals






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






18. Deferral of an expense! (Except land)






19. Contributed Capital + Retained Earnings

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20. As an expense and the corresponding liability accumulate.






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






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






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






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






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

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






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






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

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29. Lists all accounts and their balances






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






31. Sole worker of your business






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






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






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






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






36. Decreases






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






38. Postponement of recognition of an expense already paid.






39. Accounting periods of less than a year.






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






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






42. Their related asset accounts on the balance sheet






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






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






45. Revenues - Expenses






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






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






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






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






50. Accounting Equation