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






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






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






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






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






6. 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.






7. Choosing the number of accounting periods






8. Accounting periods of less than a year.






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






10. 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






11. The amount allocated to any one accounting period.






12. Revenues - Expenses






13. Postponement of recognition of an expense already paid.






14. 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)






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






16. Contains only balance sheet accounts.






17. Their related asset accounts on the balance sheet






18. Sole worker of your business






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






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






21. Cash account






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






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






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






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






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






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






28. Decreases






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






30. Lists all accounts and their balances






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






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






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






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






35. Increases






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






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






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






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






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






41. As an expense and the corresponding liability accumulate.






42. Accounting Equation






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






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






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

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46. 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






47. 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






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






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






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

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