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






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






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






4. Their related asset accounts on the balance sheet






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






6. Contributed Capital + Retained Earnings

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






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






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






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






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






12. Working totals






13. Accounting periods of less than a year.






14. Decreases






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






16. 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.






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






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






19. Contains only balance sheet accounts.






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






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






22. 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






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






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






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






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






27. Deferral of an expense! (Except land)






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






29. The amount allocated to any one accounting period.






30. Cash account






31. Revenues - Expenses






32. Lists all accounts and their balances






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






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

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35. Postponement of recognition of an expense already paid.






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






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






38. A net loss occurs






39. Increases






40. As an expense and the corresponding liability accumulate.






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






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

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43. Choosing the number of accounting periods






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






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






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






47. 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)






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






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






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