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






2. Cash account






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






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






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






6. 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.






7. Postponement of recognition of an expense already paid.






8. Revenues - Expenses






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






10. Deferral of an expense! (Except land)






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






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






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






14. Decreases






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. As an expense and the corresponding liability accumulate.






17. Sole worker of your business






18. Increases






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






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






21. People that estimate various things






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






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






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






25. Contributed Capital + Retained Earnings

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26. International Accounting Standards Board.






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






28. 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.






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






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






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






32. 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






33. Accounting periods of less than a year.






34. Their related asset accounts on the balance sheet






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






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






37. Choosing the number of accounting periods






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






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






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

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41. Lists all accounts and their balances






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






43. The amount allocated to any one accounting period.






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






45. Contains only balance sheet accounts.






46. 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






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

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






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






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