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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 corporate policy - declares dividends and appoints management.






2. Deferral of an expense! (Except land)






3. 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.






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






5. Contributed Capital + Retained Earnings


6. A net loss occurs






7. Increases






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






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






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






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






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






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






14. International Accounting Standards Board.






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






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






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






18. Decreases






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






20. As an expense and the corresponding liability accumulate.






21. 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.






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






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


24. Sole worker of your business






25. Choosing the number of accounting periods






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






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






28. 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






29. Accounting periods of less than a year.






30. The amount allocated to any one accounting period.






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






32. Postponement of recognition of an expense already paid.






33. Accounting Equation






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






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






36. Cash account






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






38. Contains only balance sheet accounts.






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






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






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






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






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






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






45. 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)






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






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






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






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






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