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






2. Lists all accounts and their balances






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. Contributed Capital + Retained Earnings

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5. Contains only balance sheet accounts.






6. As an expense and the corresponding liability accumulate.






7. 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)






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






9. The amount allocated to any one accounting period.






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






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






12. A net loss occurs






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






14. International Accounting Standards Board.






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






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






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






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






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






20. Revenues - Expenses






21. Accounting periods of less than a year.






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






23. Working totals






24. Decreases






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






26. 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






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






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






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






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

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






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






33. 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






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






35. Sole worker of your business






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






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






38. 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.






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






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






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






42. Choosing the number of accounting periods






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






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






45. Postponement of recognition of an expense already paid.






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






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

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






49. Their related asset accounts on the balance sheet






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