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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. Contributed Capital + Retained Earnings

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






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






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






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






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






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






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






9. People that estimate various things






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






11. A net loss occurs






12. Decreases






13. 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.






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






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. Contains only balance sheet accounts.






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






18. Accounting periods of less than a year.






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

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






21. Their related asset accounts on the balance sheet






22. 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






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






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






25. Cash account






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






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






28. Decreases






29. 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






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






31. Working totals






32. Revenues - Expenses






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






34. Postponement of recognition of an expense already paid.






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






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






37. 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






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






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






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






41. Increases






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






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






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






45. 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.






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






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






48. Choosing the number of accounting periods






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






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