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






2. Increases






3. Working totals






4. Contains only balance sheet accounts.






5. 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)






6. Lists all accounts and their balances






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






8. Postponement of recognition of an expense already paid.






9. Accounting Equation






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






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






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






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






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






15. The amount allocated to any one accounting period.






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






17. People that estimate various things






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






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






20. Accounting periods of less than a year.






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






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






23. 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.






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






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






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






27. Cash account






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






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






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






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






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






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






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






35. Sole worker of your business






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






37. 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.






38. A net loss occurs






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






40. Decreases






41. As an expense and the corresponding liability accumulate.






42. 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






43. Their related asset accounts on the balance sheet






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






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






46. Contributed Capital + Retained Earnings

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






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






49. 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






50. Decreases