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






2. Cash account






3. Revenues - Expenses






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






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


6. Their related asset accounts on the balance sheet






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






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






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






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






11. A net loss occurs






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






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






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






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






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






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






18. People that estimate various things






19. Accounting periods of less than a year.






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






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






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






23. 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.






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






25. Contributed Capital + Retained Earnings


26. 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






27. As an expense and the corresponding liability accumulate.






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






29. The amount allocated to any one accounting period.






30. Increases






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






32. Deferral of an expense! (Except land)






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






34. Choosing the number of accounting periods






35. Lists all accounts and their balances






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






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






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






39. 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






40. 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






41. Sole worker of your business






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






43. Working totals






44. 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)






45. Accounting Equation






46. Decreases






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






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


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






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