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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. Contributed Capital + Retained Earnings

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






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






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






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






6. Contains only balance sheet accounts.






7. As an expense and the corresponding liability accumulate.






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






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






10. A net loss occurs






11. Their related asset accounts on the balance sheet






12. 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.






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






14. Cash account






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






16. 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)






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






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






19. International Accounting Standards Board.






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






21. Decreases






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






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

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24. Choosing the number of accounting periods






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






26. 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






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






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






29. 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






30. 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.






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






32. Revenues - Expenses






33. Increases






34. Lists all accounts and their balances






35. People that estimate various things






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






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






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






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

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40. Working totals






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






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






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






44. Postponement of recognition of an expense already paid.






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






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






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






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






49. 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






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