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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. 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






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






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






4. Working totals






5. Choosing the number of accounting periods






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






7. Accounting periods of less than a year.






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






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






10. A net loss occurs






11. Decreases






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






13. International Accounting Standards Board.






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






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






16. Decreases






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






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






19. 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)






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






21. Accounting Equation






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






23. Increases






24. 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






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






26. 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.






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






28. Contains only balance sheet accounts.






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






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






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

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






33. People that estimate various things






34. Revenues - Expenses






35. Contributed Capital + Retained Earnings

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36. Sole worker of your business






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






38. Postponement of recognition of an expense already paid.






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






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






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






42. Lists all accounts and their balances






43. 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.






44. 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






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






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






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






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






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






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