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






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






3. Their related asset accounts on the balance sheet






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






5. People that estimate various things






6. Accounting periods of less than a year.






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

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






9. Revenues - Expenses






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






11. Working totals






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






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






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






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






16. As an expense and the corresponding liability accumulate.






17. The amount allocated to any one accounting period.






18. 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






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






20. Decreases






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






22. International Accounting Standards Board.






23. Choosing the number of accounting periods






24. Decreases






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






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






27. A net loss occurs






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






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






30. 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.






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






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






33. Increases






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






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






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






37. Accounting Equation






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






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






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






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






42. 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)






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






44. 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






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






46. Contributed Capital + Retained Earnings

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






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






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






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