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


3. The amount allocated to any one accounting period.






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






5. Accounting Equation






6. 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.






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






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






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






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






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






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






13. 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






14. As an expense and the corresponding liability accumulate.






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






16. 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)






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






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






19. 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






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






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


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






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






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






25. Working totals






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






27. Choosing the number of accounting periods






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






29. 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






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






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






32. Contributed Capital + Retained Earnings


33. Accounting periods of less than a year.






34. Increases






35. Contains only balance sheet accounts.






36. Cash account






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






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






39. People that estimate various things






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






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






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






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






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






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






47. Decreases






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






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






50. A net loss occurs