Test your basic knowledge |

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






2. Deferral of an expense! (Except land)






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






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






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






6. Decreases






7. 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.






8. 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)






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






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






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






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






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






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






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






16. Increases






17. 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






18. 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.






19. Postponement of recognition of an expense already paid.






20. Accounting Equation






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






22. Revenues - Expenses






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






24. 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






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






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






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


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. Contains only balance sheet accounts.






30. Accounting periods of less than a year.






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






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






33. Lists all accounts and their balances






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






35. Contributed Capital + Retained Earnings


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






37. As an expense and the corresponding liability accumulate.






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






39. People that estimate various things






40. A net loss occurs






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






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






43. Choosing the number of accounting periods






44. International Accounting Standards Board.






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






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






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






48. The amount allocated to any one accounting period.






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






50. Sole worker of your business