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






2. Sole worker of your business






3. As an expense and the corresponding liability accumulate.






4. Accounting Equation






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






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






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






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






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






11. 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






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






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






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






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






16. Decreases






17. Lists all accounts and their balances






18. The amount allocated to any one accounting period.






19. Increases






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






21. International Accounting Standards Board.






22. A net loss occurs






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






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






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






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






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






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






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






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






31. 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






32. Cash account






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






34. Decreases






35. Deferral of an expense! (Except land)






36. People that estimate various things






37. Choosing the number of accounting periods






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

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39. Postponement of recognition of an expense already paid.






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






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






42. Revenues - Expenses






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






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






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






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






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






48. Accounting periods of less than a year.






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






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