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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. A separate account that is paired with a related account






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






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






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






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






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






7. 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






8. As an expense and the corresponding liability accumulate.






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






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






11. 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)






12. Lists all accounts and their balances






13. 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






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






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






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






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

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






19. Contains only balance sheet accounts.






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






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






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






23. Postponement of recognition of an expense already paid.






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






25. Deferral of an expense! (Except land)






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






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






28. The amount allocated to any one accounting period.






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

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






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






32. Working totals






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






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






35. Sole worker of your business






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






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






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






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






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






41. Decreases






42. Accounting Equation






43. Revenues - Expenses






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






45. People that estimate various things






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






47. Increases






48. Their related asset accounts on the balance sheet






49. 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






50. Cash account