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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. People that estimate various things






2. International Accounting Standards Board.






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






4. The amount allocated to any one accounting period.






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






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






7. 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.






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






9. 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.






10. Increases






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






12. Their related asset accounts on the balance sheet






13. Contributed Capital + Retained Earnings

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14. Working totals






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






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






17. Choosing the number of accounting periods






18. Deferral of an expense! (Except land)






19. 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)






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






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






22. 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






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






24. A net loss occurs






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






26. Accounting Equation






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






28. As an expense and the corresponding liability accumulate.






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






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






31. Accounting periods of less than a year.






32. Decreases






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

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

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






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






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






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






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






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






41. Revenues - Expenses






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






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






44. 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






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






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






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






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






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






50. Postponement of recognition of an expense already paid.