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


2. People that estimate various things






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






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






5. Accounting Equation






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






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






8. Lists all accounts and their balances






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






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






11. Cash account






12. Decreases






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






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






15. Contributed Capital + Retained Earnings


16. Working totals






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






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






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






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






21. Revenues - Expenses






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






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






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






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






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






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. 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






29. 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.






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






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






32. 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






33. Accounting periods of less than a year.






34. International Accounting Standards Board.






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






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






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






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






39. Sole worker of your business






40. Choosing the number of accounting periods






41. 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.






42. 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






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






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






45. Decreases






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






47. A net loss occurs






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






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






50. Contains only balance sheet accounts.