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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. 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






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






3. 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






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






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






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






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






8. Postponement of recognition of an expense already paid.






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






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

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






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






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






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






15. Accounting periods of less than a year.






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






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






18. The amount allocated to any one accounting period.






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






20. 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)






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






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






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






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






25. 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.






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






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






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






29. Deferral of an expense! (Except land)






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






31. Revenues - Expenses






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






33. 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






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

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35. Increases






36. Cash account






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






38. Working totals






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






40. Contains only balance sheet accounts.






41. As an expense and the corresponding liability accumulate.






42. A net loss occurs






43. Their related asset accounts on the balance sheet






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






45. Decreases






46. International Accounting Standards Board.






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






48. Accounting Equation






49. People that estimate various things






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