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






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






3. Sole worker of your business






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






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






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






7. Accounting Equation






8. Revenues - Expenses






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






10. 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.






11. Decreases






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






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






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






15. 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.






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






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






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






19. Postponement of recognition of an expense already paid.






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






21. Contains only balance sheet accounts.






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






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






24. Lists all accounts and their balances






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






26. Increases






27. 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






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






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






30. Working totals






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






32. Accounting periods of less than a year.






33. International Accounting Standards Board.






34. A net loss occurs






35. Choosing the number of accounting periods






36. 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






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






38. Decreases






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






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






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






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






43. The amount allocated to any one accounting period.






44. Cash account






45. 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






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






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






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






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






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