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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. Contributed Capital + Retained Earnings


2. Contains only balance sheet accounts.






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






4. 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






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






6. 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






7. Decreases






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






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






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






11. Choosing the number of accounting periods






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






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






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






15. Revenues - Expenses






16. Increases






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






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






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


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






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






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






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






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






26. 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.






27. Deferral of an expense! (Except land)






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






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






30. Sole worker of your business






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






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






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






34. The amount allocated to any one accounting period.






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






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






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






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






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






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






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






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






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






44. Working totals






45. Postponement of recognition of an expense already paid.






46. Accounting Equation






47. Accounting periods of less than a year.






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






49. Their related asset accounts on the balance sheet






50. People that estimate various things