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






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






3. Contributed Capital + Retained Earnings


4. Lists all accounts and their balances






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






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






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






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






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






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






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






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






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






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






15. A net loss occurs






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






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






18. 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






19. 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.






20. International Accounting Standards Board.






21. Contains only balance sheet accounts.






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






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






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






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






26. Cash account






27. The amount allocated to any one accounting period.






28. Postponement of recognition of an expense already paid.






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






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






31. Working totals






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






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






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






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






36. 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)






37. 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






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






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






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






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






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






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






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


45. Decreases






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






47. Increases






48. As an expense and the corresponding liability accumulate.






49. 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






50. Accounting periods of less than a year.