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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 amount allocated to any one accounting period.






2. People that estimate various things






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






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






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






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






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






8. Contains only balance sheet accounts.






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






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






11. Decreases






12. Cash account






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






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






15. Working totals






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






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






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






19. 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)






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






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






23. Sole worker of your business






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






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






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






27. 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.






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






29. A net loss occurs






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






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






32. 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






33. International Accounting Standards Board.






34. Their related asset accounts on the balance sheet






35. Deferral of an expense! (Except land)






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






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






38. As an expense and the corresponding liability accumulate.






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






40. Accounting periods of less than a year.






41. Common Stock + Retained Earnings - Dividends + Revenues - Expenses


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. Lists all accounts and their balances






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






45. Postponement of recognition of an expense already paid.






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


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






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






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






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