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






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






4. 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)






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






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






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






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






9. Sole worker of your business






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






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






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






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






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






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






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






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






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






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






20. Accounting periods of less than a year.






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






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






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






24. Working totals






25. 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






26. Contributed Capital + Retained Earnings


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






28. Decreases






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






30. Revenues - Expenses






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


32. 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






33. Choosing the number of accounting periods






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






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






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


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






38. Accounting Equation






39. Increases






40. Decreases






41. Deferral of an expense! (Except land)






42. Cash account






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






44. 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.






45. Lists all accounts and their balances






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






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






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






49. People that estimate various things






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