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






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






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






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






5. 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)






6. Revenues - Expenses






7. 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






8. Contains only balance sheet accounts.






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






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






11. People that estimate various things






12. Lists all accounts and their balances






13. Their related asset accounts on the balance sheet






14. Postponement of recognition of an expense already paid.






15. Working totals






16. Decreases






17. International Accounting Standards Board.






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






19. Decreases






20. 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






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






22. Choosing the number of accounting periods






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






24. 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.






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






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






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






28. Increases






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






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






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






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






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






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






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






36. The amount allocated to any one accounting period.






37. As an expense and the corresponding liability accumulate.






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






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






40. Contributed Capital + Retained Earnings

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






42. Accounting periods of less than a year.






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

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






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






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






47. Accounting Equation






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






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






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