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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. Working totals






2. 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






3. Increases






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






5. Deferral of an expense! (Except land)






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






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






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






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






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






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






12. Revenues - Expenses






13. 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)






14. Postponement of recognition of an expense already paid.






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






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






17. Sole worker of your business






18. As an expense and the corresponding liability accumulate.






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






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






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






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






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






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






25. Contributed Capital + Retained Earnings

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






27. Cash account






28. Decreases






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






30. International Accounting Standards Board.






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






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






33. Decreases






34. People that estimate various things






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






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

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






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






39. 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.






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






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






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






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






44. 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.






45. Choosing the number of accounting periods






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






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

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






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






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