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






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






3. The amount allocated to any one accounting period.






4. 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






5. Lists all accounts and their balances






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






7. Decreases






8. Accounting Equation






9. Accounting periods of less than a year.






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






11. Revenues - Expenses






12. Postponement of recognition of an expense already paid.






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






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






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






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






17. Decreases






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






19. Cash account






20. 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






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






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






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






24. 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.






25. Increases






26. Deferral of an expense! (Except land)






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






28. Contributed Capital + Retained Earnings


29. 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.






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






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






32. 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)






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






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






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






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






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


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






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






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






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






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






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






44. People that estimate various things






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


46. Their related asset accounts on the balance sheet






47. International Accounting Standards Board.






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






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






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