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






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






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






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






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






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






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






8. Accounting Equation






9. As an expense and the corresponding liability accumulate.






10. Their related asset accounts on the balance sheet






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


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






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






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






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






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






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






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






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






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






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






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






23. The amount allocated to any one accounting period.






24. 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






25. Deferral of an expense! (Except land)






26. International Accounting Standards Board.






27. 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.






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






29. 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)






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






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






32. Contains only balance sheet accounts.






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






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






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


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






37. Postponement of recognition of an expense already paid.






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






39. 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






40. Increases






41. Cash account






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






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






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






45. Decreases






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






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






48. Choosing the number of accounting periods






49. Sole worker of your business






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