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






2. Revenues - Expenses






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






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






5. A net loss occurs






6. Contributed Capital + Retained Earnings

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7. Working totals






8. Accounting Equation






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






10. 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






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






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






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






14. Accounting periods of less than a year.






15. 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)






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






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

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






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






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






21. Decreases






22. Lists all accounts and their balances






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






24. Decreases






25. People that estimate various things






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






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






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






29. The amount allocated to any one accounting period.






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






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






32. Deferral of an expense! (Except land)






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






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






35. 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






36. Postponement of recognition of an expense already paid.






37. Choosing the number of accounting periods






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






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






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






41. Increases






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






43. 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.






44. As an expense and the corresponding liability accumulate.






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






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






47. Their related asset accounts on the balance sheet






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






49. Revenues that a company has earned but for which no entry has been made in the accounting records






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

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