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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 amount allocated to any one accounting period.






2. 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)






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






4. 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.






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

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






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






8. Increases






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






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






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






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






13. Sole worker of your business






14. As an expense and the corresponding liability accumulate.






15. Decreases






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

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






18. Lists all accounts and their balances






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






20. Their related asset accounts on the balance sheet






21. Postponement of recognition of an expense already paid.






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






23. Revenues - Expenses






24. Accounting periods of less than a year.






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






26. Contributed Capital + Retained Earnings

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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. Deferral of an expense! (Except land)






29. People that estimate various things






30. 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.






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






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






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






34. Decreases






35. Cash account






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






37. International Accounting Standards Board.






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






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






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






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






42. A net loss occurs






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






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






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






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






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






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






49. Contains only balance sheet accounts.






50. Working totals