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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. Choosing the number of accounting periods






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






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






4. Deferral of an expense! (Except land)






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






6. Revenues - Expenses






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

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






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






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






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






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






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






14. Working totals






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






16. Decreases






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






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






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






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






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






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






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






24. 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






25. The amount allocated to any one accounting period.






26. People that estimate various things






27. 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






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






29. Postponement of recognition of an expense already paid.






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






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






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






33. 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)






34. Increases






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






36. 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.






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






38. Cash account






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






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






41. As an expense and the corresponding liability accumulate.






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






43. 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.






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






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






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






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






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






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






50. 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