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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. Decreases






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






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






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






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






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






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






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






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






10. Choosing the number of accounting periods






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






12. Increases






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






14. Accounting Equation






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






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






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






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






19. 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)






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






21. Accounting periods of less than a year.






22. Lists all accounts and their balances






23. The amount allocated to any one accounting period.






24. Postponement of recognition of an expense already paid.






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






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






27. As an expense and the corresponding liability accumulate.






28. 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






29. Contains only balance sheet accounts.






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

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31. 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.






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






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






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






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






36. 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.






37. Revenues - Expenses






38. A net loss occurs






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

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






41. Working totals






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






43. Decreases






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






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






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






47. Their related asset accounts on the balance sheet






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






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