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






2. 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)






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






4. Accounting periods of less than a year.






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






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






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






8. Sole worker of your business






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

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






11. Cash account






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






13. 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






14. Decreases






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






16. People that estimate various things






17. 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






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






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






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






21. A net loss occurs






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






23. Accounting Equation






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






25. Their related asset accounts on the balance sheet






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






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






28. Choosing the number of accounting periods






29. The amount allocated to any one accounting period.






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






31. 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






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






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






34. Contributed Capital + Retained Earnings

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35. Contains only balance sheet accounts.






36. Working totals






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






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






39. Revenues - Expenses






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






41. Deferral of an expense! (Except land)






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






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






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






45. Decreases






46. Postponement of recognition of an expense already paid.






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






48. Lists all accounts and their balances






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






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