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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. 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






2. Choosing the number of accounting periods






3. Revenues - Expenses






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






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






6. People that estimate various things






7. A net loss occurs






8. 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






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






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






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






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






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






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






15. Increases






16. Cash account






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






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






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






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






21. Decreases






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






23. 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.






24. The amount allocated to any one accounting period.






25. Lists all accounts and their balances






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

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27. 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






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






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






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






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






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






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






35. Contributed Capital + Retained Earnings

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

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37. Sole worker of your business






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






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






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






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






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






43. International Accounting Standards Board.






44. Their related asset accounts on the balance sheet






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






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






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






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






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






50. Contains only balance sheet accounts.