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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. Postponement of recognition of an expense already paid.






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






3. The amount allocated to any one accounting period.






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






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

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






7. Increases






8. 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.






9. Deferral of an expense! (Except land)






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






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






12. A net loss occurs






13. Cash account






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






15. Accounting Equation






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






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






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






19. People that estimate various things






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






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






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






23. 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






24. Contributed Capital + Retained Earnings

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25. Decreases






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






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






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






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






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






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






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






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






34. Contains only balance sheet accounts.






35. Revenues - Expenses






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






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






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






39. Accounting periods of less than a year.






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






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






42. As an expense and the corresponding liability accumulate.






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






44. 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)






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






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






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






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






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






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