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






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

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






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






6. 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






7. The amount allocated to any one accounting period.






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






9. Their related asset accounts on the balance sheet






10. Decreases






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






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






13. Contributed Capital + Retained Earnings

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14. Lists all accounts and their balances






15. As an expense and the corresponding liability accumulate.






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






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






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






19. Revenues - Expenses






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






21. Working totals






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






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






24. 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)






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






26. 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.






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






28. 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






29. Postponement of recognition of an expense already paid.






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






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






32. A net loss occurs






33. Accounting periods of less than a year.






34. Increases






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






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






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






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






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






40. Contains only balance sheet accounts.






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






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






43. 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.






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






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






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






47. 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






48. Choosing the number of accounting periods






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






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







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