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






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






4. Working totals






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






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






7. As an expense and the corresponding liability accumulate.






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






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






10. Their related asset accounts on the balance sheet






11. Postponement of recognition of an expense already paid.






12. Revenues - Expenses






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






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






15. Contributed Capital + Retained Earnings

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16. 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






17. The amount allocated to any one accounting period.






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






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

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20. People that estimate various things






21. 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






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






23. 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.






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






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






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






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






28. Accounting Equation






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






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






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






32. Decreases






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






34. International Accounting Standards Board.






35. Sole worker of your business






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






37. Increases






38. Accounting periods of less than a year.






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






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






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






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






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






44. Lists all accounts and their balances






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






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






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






48. Deferral of an expense! (Except land)






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






50. 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)