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






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






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






4. Contributed Capital + Retained Earnings

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5. 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






6. The amount allocated to any one accounting period.






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






8. 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)






9. Deferral of an expense! (Except land)






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






11. Decreases






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






13. Sole worker of your business






14. As an expense and the corresponding liability accumulate.






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






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






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






18. Lists all accounts and their balances






19. 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.






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






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






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






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






24. 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






25. International Accounting Standards Board.






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






27. Working totals






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






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






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






31. Choosing the number of accounting periods






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






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






34. A net loss occurs






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






36. Cash account






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






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






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






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






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






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






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

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44. Accounting periods of less than a year.






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






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






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






48. Accounting Equation






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






50. 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.