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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. As an expense and the corresponding liability accumulate.






2. Their related asset accounts on the balance sheet






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






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






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






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






7. Deferral of an expense! (Except land)






8. Contributed Capital + Retained Earnings

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






10. Accounting periods of less than a year.






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






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






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






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






15. 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)






16. A net loss occurs






17. Contains only balance sheet accounts.






18. Choosing the number of accounting periods






19. 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.






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






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






22. Working totals






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






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






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






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






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






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






29. Lists all accounts and their balances






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






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






32. Increases






33. Sole worker of your business






34. Decreases






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






36. The amount allocated to any one accounting period.






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






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






39. International Accounting Standards Board.






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






41. Revenues - Expenses






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






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






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






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






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






48. 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






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

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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.