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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. 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






2. Lists all accounts and their balances






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






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






5. Contributed Capital + Retained Earnings

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6. Accounting Equation






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






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






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






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






11. 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.






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






13. People that estimate various things






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






15. 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.






16. The amount allocated to any one accounting period.






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






18. As an expense and the corresponding liability accumulate.






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






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






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






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






23. Postponement of recognition of an expense already paid.






24. Deferral of an expense! (Except land)






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






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






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






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






30. A net loss occurs






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






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

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33. Decreases






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






35. Choosing the number of accounting periods






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






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






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






39. Increases






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






41. Revenues - Expenses






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






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






44. Their related asset accounts on the balance sheet






45. Sole worker of your business






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






47. 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)






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






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

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50. Accounting periods of less than a year.