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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. 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






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






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






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






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






6. Contains only balance sheet accounts.






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






8. 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.






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






10. Accounting Equation






11. Accounting periods of less than a year.






12. Choosing the number of accounting periods






13. Decreases






14. As an expense and the corresponding liability accumulate.






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






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






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






18. Cash account






19. Contributed Capital + Retained Earnings

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20. International Accounting Standards Board.






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

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






23. Working totals






24. 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






25. Decreases






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






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






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






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






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






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






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






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






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






35. A net loss occurs






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






37. Deferral of an expense! (Except land)






38. 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)






39. Revenues - Expenses






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

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






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






43. The amount allocated to any one accounting period.






44. Their related asset accounts on the balance sheet






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






46. Sole worker of your business






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






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






49. People that estimate various things






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