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






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

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






4. A net loss occurs






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






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






7. As an expense and the corresponding liability accumulate.






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






9. Cash account






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






11. 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






12. 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.






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






14. Decreases






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






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






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






18. Accounting periods of less than a year.






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






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






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






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






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

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






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






26. Contributed Capital + Retained Earnings

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






28. Decreases






29. Revenues - Expenses






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






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






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






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






34. Accounting Equation






35. Choosing the number of accounting periods






36. The amount allocated to any one accounting period.






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






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






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






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






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






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






43. Working totals






44. Deferral of an expense! (Except land)






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






46. Sole worker of your business






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






48. People that estimate various things






49. 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)






50. 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.