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






2. 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






3. 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.






4. 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






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






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






7. Cash account






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






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






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






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






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






13. As an expense and the corresponding liability accumulate.






14. Contributed Capital + Retained Earnings


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






16. Contains only balance sheet accounts.






17. A net loss occurs






18. Decreases






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






20. People that estimate various things






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






22. Choosing the number of accounting periods






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






24. 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.






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






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






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






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






29. Lists all accounts and their balances






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






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


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






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






34. Their related asset accounts on the balance sheet






35. Revenues - Expenses






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






37. Accounting periods of less than a year.






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






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






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






41. Decreases






42. Increases






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






44. Accounting Equation






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






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






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






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






49. The amount allocated to any one accounting period.






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