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






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






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






5. 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.






6. Increases






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






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






9. 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.






10. Contributed Capital + Retained Earnings

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11. Decreases






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






13. International Accounting Standards Board.






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






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






16. Revenues - Expenses






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






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






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

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






21. Accounting Equation






22. Lists all accounts and their balances






23. People that estimate various things






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






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






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






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






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






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






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






31. 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






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






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






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






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






36. A net loss occurs






37. 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)






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






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

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






41. 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






42. Accounting periods of less than a year.






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






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






45. Decreases






46. Cash account






47. 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






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






49. The amount allocated to any one accounting period.






50. Their related asset accounts on the balance sheet