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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. Cash account






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






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

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4. Contains only balance sheet accounts.






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






6. 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






7. Sole worker of your business






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






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






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






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






12. Increases






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






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






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






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






17. 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.






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






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






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






21. People that estimate various things






22. Their related asset accounts on the balance sheet






23. Working totals






24. Postponement of recognition of an expense already paid.






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






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






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






28. 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






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






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






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






32. Lists all accounts and their balances






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






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






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






36. International Accounting Standards Board.






37. 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.






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






40. 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)






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






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






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






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

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45. Decreases






46. Deferral of an expense! (Except land)






47. Accounting periods of less than a year.






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






49. Decreases






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