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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. Choosing the number of accounting periods






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






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






4. Postponement of recognition of an expense already paid.






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






6. Deferral of an expense! (Except land)






7. Contains only balance sheet accounts.






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






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






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






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






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






13. 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






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






15. Lists all accounts and their balances






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






17. 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.






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






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






20. Decreases






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






22. Revenues - Expenses






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






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






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






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






27. Sole worker of your business






28. International Accounting Standards Board.






29. 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






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






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






32. Accounting periods of less than a year.






33. 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






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






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






36. 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.






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






38. Cash account






39. As an expense and the corresponding liability accumulate.






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

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






42. Accounting Equation






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






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






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






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






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






48. Decreases






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






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