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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 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)






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






3. Contains only balance sheet accounts.






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






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






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






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






8. As an expense and the corresponding liability accumulate.






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






10. A net loss occurs






11. Decreases






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






13. Choosing the number of accounting periods






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






15. Their related asset accounts on the balance sheet






16. 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






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






18. Accounting Equation






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






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






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






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






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






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






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






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. 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.






28. 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.






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






30. The amount allocated to any one accounting period.






31. Accounting periods of less than a year.






32. Decreases






33. Contributed Capital + Retained Earnings

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






35. 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






36. Cash account






37. People that estimate various things






38. International Accounting Standards Board.






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






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

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






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






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






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






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






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






47. 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






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






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






50. Working totals