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

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2. 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






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






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






5. Decreases






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






7. 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






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






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






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






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






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






13. A net loss occurs






14. Deferral of an expense! (Except land)






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






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






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






18. Contributed Capital + Retained Earnings

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






20. Lists all accounts and their balances






21. Postponement of recognition of an expense already paid.






22. Working totals






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






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






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






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






27. Accounting Equation






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






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

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






31. 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.






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






33. 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)






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






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






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






37. International Accounting Standards Board.






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






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






40. Revenues - Expenses






41. Decreases






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






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






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






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






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






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






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






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






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