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






2. Lists all accounts and their balances






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






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






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






6. Increases






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






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






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






10. 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






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






12. Revenues - Expenses






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






14. Deferral of an expense! (Except land)






15. Cash account






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






17. Their related asset accounts on the balance sheet






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






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






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






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






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






23. A net loss occurs






24. Contributed Capital + Retained Earnings

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25. 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






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






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






28. 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.






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






30. 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)






31. Contains only balance sheet accounts.






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

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33. Sole worker of your business






34. As an expense and the corresponding liability accumulate.






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






36. Choosing the number of accounting periods






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






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






39. Decreases






40. 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.






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






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






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






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






45. Decreases






46. Accounting Equation






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






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






49. People that estimate various things






50. The amount allocated to any one accounting period.