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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. As an expense and the corresponding liability accumulate.






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






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






4. Working totals






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






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






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






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






9. Postponement of recognition of an expense already paid.






10. 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.






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






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






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






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






15. Their related asset accounts on the balance sheet






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






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






18. Cash account






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






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

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21. 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






22. Deferral of an expense! (Except land)






23. The amount allocated to any one accounting period.






24. Increases






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






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






27. Lists all accounts and their balances






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






29. 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






30. International Accounting Standards Board.






31. Sole worker of your business






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






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






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






35. People that estimate various things






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






37. 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.






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






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






40. Accounting Equation






41. A net loss occurs






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






43. Revenues - Expenses






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






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






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






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






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






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






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