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






2. Cash account






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






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






5. Increases






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






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






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






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






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






11. Sole worker of your business






12. A net loss occurs






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






14. Decreases






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






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






17. 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.






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






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






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






21. Revenues - Expenses






22. As an expense and the corresponding liability accumulate.






23. 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






24. Contributed Capital + Retained Earnings

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






26. Lists all accounts and their balances






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






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






29. Deferral of an expense! (Except land)






30. 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






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






32. Working totals






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






34. Decreases






35. 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.






36. People that estimate various things






37. International Accounting Standards Board.






38. Accounting Equation






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






40. 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






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






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






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

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44. Contains only balance sheet accounts.






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






46. The amount allocated to any one accounting period.






47. Postponement of recognition of an expense already paid.






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






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






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