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






2. Contributed Capital + Retained Earnings

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






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






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






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






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






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






9. 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






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






11. The amount allocated to any one accounting period.






12. Working totals






13. As an expense and the corresponding liability accumulate.






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

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






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






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






18. People that estimate various things






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






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






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






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






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






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






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






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






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






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






29. Contains only balance sheet accounts.






30. Choosing the number of accounting periods






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






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






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

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34. Increases






35. Deferral of an expense! (Except land)






36. Lists all accounts and their balances






37. Accounting Equation






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






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






40. 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.






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






42. Revenues - Expenses






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






44. 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






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






46. Postponement of recognition of an expense already paid.






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






48. A net loss occurs






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






50. Their related asset accounts on the balance sheet