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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 difficulty of deciding when a business transaction should be recorded






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






3. Contributed Capital + Retained Earnings


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






5. 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)






6. Lists all accounts and their balances






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






8. Deferral of an expense! (Except land)






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






10. Decreases






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






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






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






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






15. Choosing the number of accounting periods






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






17. 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






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






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






20. Accounting Equation






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






22. Contains only balance sheet accounts.






23. The amount allocated to any one accounting period.






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






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






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






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






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






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






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






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






32. Working totals






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






34. Postponement of recognition of an expense already paid.






35. People that estimate various things






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






37. Decreases






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






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






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






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






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






44. 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






45. As an expense and the corresponding liability accumulate.






46. Accounting periods of less than a year.






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


48. Increases






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






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