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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. 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.






2. 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






3. 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.






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

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






6. Decreases






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






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






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






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






11. People that estimate various things






12. 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






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






14. A net loss occurs






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






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






17. Lists all accounts and their balances






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






19. Contributed Capital + Retained Earnings

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






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






22. Deferral of an expense! (Except land)






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






24. Working totals






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






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






27. Sole worker of your business






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






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






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






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

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






33. Accounting periods of less than a year.






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






35. Increases






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






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






38. Their related asset accounts on the balance sheet






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






40. Choosing the number of accounting periods






41. Contains only balance sheet accounts.






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






43. 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)






44. 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






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






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






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






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






49. The amount allocated to any one accounting period.






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