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






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






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






4. 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






5. 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)






6. 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






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






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






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






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






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






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






13. Cash account






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






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






16. Contains only balance sheet accounts.






17. Increases






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






19. As an expense and the corresponding liability accumulate.






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






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






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






23. Revenues - Expenses






24. Contributed Capital + Retained Earnings

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






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






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






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






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






30. Sole worker of your business






31. A net loss occurs






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






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






34. 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.






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






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






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






38. Deferral of an expense! (Except land)






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

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40. The amount allocated to any one accounting period.






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






42. 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.






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






44. Accounting periods of less than a year.






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






46. Working totals






47. Their related asset accounts on the balance sheet






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






50. 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