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






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






3. The amount allocated to any one accounting period.






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






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






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






7. Cash account






8. Revenues - Expenses






9. A net loss occurs






10. 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.






11. Sole worker of your business






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






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






14. Lists all accounts and their balances






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

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16. 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






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






18. Postponement of recognition of an expense already paid.






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






20. 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






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






22. Increases






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

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






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






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






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






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






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






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






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






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






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






34. Deferral of an expense! (Except land)






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






36. Decreases






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






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






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






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






41. Contains only balance sheet accounts.






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






43. Working totals






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






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






46. Accounting periods of less than a year.






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






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






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






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.