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






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






3. Decreases






4. 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)






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






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






7. International Accounting Standards Board.






8. People that estimate various things






9. Contains only balance sheet accounts.






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






11. Contributed Capital + Retained Earnings

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12. As an expense and the corresponding liability accumulate.






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






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






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






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






17. Revenues - Expenses






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






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






20. Working totals






21. 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






22. A net loss occurs






23. Accounting Equation






24. The amount allocated to any one accounting period.






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






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






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






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






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






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






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






32. Lists all accounts and their balances






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






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






35. 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.






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






37. Accounting periods of less than a year.






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






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






40. Sole worker of your business






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

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






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






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






45. Decreases






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






47. Increases






48. Choosing the number of accounting periods






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






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