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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. 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.






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






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






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






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






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






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






8. Revenues - Expenses






9. International Accounting Standards Board.






10. As an expense and the corresponding liability accumulate.






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






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






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






14. Sole worker of your business






15. A net loss occurs






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






17. Their related asset accounts on the balance sheet






18. 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






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






20. 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.






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






22. Decreases






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






24. Accounting periods of less than a year.






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






26. Contains only balance sheet accounts.






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






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






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






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

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31. Cash account






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






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






34. Postponement of recognition of an expense already paid.






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






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






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






38. 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






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






40. Lists all accounts and their balances






41. Working totals






42. Choosing the number of accounting periods






43. People that estimate various things






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. Increases






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






47. Decreases






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






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






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