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CLEP Financial Accounting Vocab

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. Money is 'expensed' if it is gone forever - if there remains no useful asset as a result of the spending. The opposite is CAPITALIZED






2. Assets that help a business or person make money






3. The 12 month period a business used to report the results of its operatons






4. The amount borrowed plus the interest up to a maturity date






5. The interest rate written on the face of a note






6. An account that gets subtracted from an asset account






7. The cost to the business of the goods that it sells






8. A note with an interest rate written on the face - whose face amount is the present value






9. Income - Expenses = Net Income






10. An account that gets subtracted from its related account. Contra accounts always get reported as negative numbers.






11. That porition of the business the owner gets to keep after paying all creditors






12. Accounts that explain why assets went down from operations






13. A supply of items a business has on hand






14. Asset has not been sold but a gain or loss has occurred






15. The official list of all business accounts






16. The inventory method that keeps track of merchandise costs in various purchases and contra-purchases accounts and then computes cost of goods sold on the income statement. Inventory on the books is adjusted only at year-end.






17. A tool to keep track of the ops and downs in account. The ups go on one side of the T and the downs go on the other






18. Debts that must be paid within one year or one operating cycle - whichever is longer






19. A financial statement analysis technique in which one number is assigned 100% and all other numbers are expressed as a percentage of the first number. In balance sheets. the key number is total assets. In income statements - the key # is sales.






20. Modified accelerated cost recovery syste - for which IRS tables tell the rate by which to multiply an assets historical cost






21. Method of journalizing and posting accounts at the same time by recording transac vertically in columns






22. An income account that explains the increase in business assets as a result of selling goods






23. A word that means a subtraction has occured






24. The inventory system that averages the cost of all items in inventory and assigns that averaged cost the the items sold.






25. Recorded the cost as an asset






26. The amount of long-lived assets used up during operations






27. Contra-asset account that accumulates all the deprec of long lived assets over the years






28. The cost the the biz of the goods it sells






29. A place on the financial books to keep track of financial info that the owners want to know






30. Where cash came from and where it went - Cash flow from operations - cash flow from investing activities - cash flow from financing activities - calculation of (1) net cash flow - and (2) cash - end of period






31. Accounts that explain why assets went up from operations






32. Money that the owner takes from the business or money in the business account that the owner spends on personal bills.






33. The amount borrowed - or the principal. Interest-bearing notes show the present value as the face amount






34. Debts owned to people outside the company






35. Money is 'expensed' if it is gone forever - if there remains no useful assert as a result of the spending. THe opposite of capitalized. `






36. The natural period of time before a certain business activities tend to repeat -usually one year






37. Outsders to whom the business owes money






38. Calc cash flow from opeations that does not start with NI - but does show cash-in cash-out cat. `






39. Usual method - starts with NI and uses the changes in the A&L accounts to adjust NI into cash flow from operations






40. Income-expenses






41. The cost of living while away from home of business






42. To sell a note to a bank that subtracts a discount - giving the seller the proceeds`






43. The contra-asset account that accumulates all the depreciation of long-lived assets over the years






44. When numbers are 'netted' they combine so that the negative numbers get subtracted from the positive numbers






45. When money is changed into another asset that helps the business make money






46. Economic resources that the business plans to use in the future to make money






47. A depr method that results in higher depr exp in an assets early years






48. Assets that can be used to pay current liabilities






49. The inventory method that increases the inventory account with every purchase and lowers the inventory with every sale.






50. The dollar amount written on the face of the note