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

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2. A net loss occurs






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






4. The amount allocated to any one accounting period.






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






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






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






8. Lists all accounts and their balances






9. Working totals






10. 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)






11. Accounting periods of less than a year.






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






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






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






15. Their related asset accounts on the balance sheet






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






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






18. As an expense and the corresponding liability accumulate.






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






20. 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






21. Increases






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






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






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

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






26. Decreases






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






28. 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






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






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






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






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






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






35. Contributed Capital + Retained Earnings

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






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






38. Choosing the number of accounting periods






39. Sole worker of your business






40. Cash account






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






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






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






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






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






46. Revenues - Expenses






47. Contains only balance sheet accounts.






48. Accounting Equation






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






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.