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






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






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






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






5. 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






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






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






8. Cash account






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






10. Their related asset accounts on the balance sheet






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






12. Accounting Equation






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






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






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






16. 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






17. 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)






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






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. Deferral of an expense! (Except land)






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






22. 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






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






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






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






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






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






28. Working totals






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






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






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

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






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






34. People that estimate various things






35. Lists all accounts and their balances






36. Postponement of recognition of an expense already paid.






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

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38. Sole worker of your business






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






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






41. The amount allocated to any one accounting period.






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






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






44. 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.






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






46. Choosing the number of accounting periods






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






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






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






50. International Accounting Standards Board.