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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 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)






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






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






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

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






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






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






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

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






10. Sole worker of your business






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






12. Lists all accounts and their balances






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






14. Contains only balance sheet accounts.






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






16. People that estimate various things






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






18. Accounting Equation






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






20. Accounting periods of less than a year.






21. Increases






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






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






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






25. Deferral of an expense! (Except land)






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






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






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






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






30. Decreases






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






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






33. Revenues - Expenses






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






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






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






37. 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.






38. 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






39. As an expense and the corresponding liability accumulate.






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






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






42. Choosing the number of accounting periods






43. Postponement of recognition of an expense already paid.






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






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






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






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






48. Their related asset accounts on the balance sheet






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






50. 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.







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Can you answer 50 questions in 15 minutes?


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