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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. Choosing the number of accounting periods






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






3. As an expense and the corresponding liability accumulate.






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






5. Accounting Equation






6. People that estimate various things






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






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






9. Accounting periods of less than a year.






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






11. Decreases






12. 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






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

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14. Contributed Capital + Retained Earnings

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






16. Increases






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






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






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






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






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






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






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

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24. 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)






25. Sole worker of your business






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






27. The amount allocated to any one accounting period.






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






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






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






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






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






33. Revenues - Expenses






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






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






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






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






38. 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






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






40. 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.






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






42. International Accounting Standards Board.






43. 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.






44. Their related asset accounts on the balance sheet






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






46. Working totals






47. 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






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