CLEP Financial Accounting Practice Exam questions with verified detailed answers

CLEP Financial Accounting Practice Exam || || || || ||




questions with verified detailed answers || || || ||




What will always increase when net income increases? - ✔✔Equity
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Accounts receivable turnover helps determine - ✔✔How quickly a firm collects cash on its credit
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sales


The income statement is designed to measure - ✔✔The results of business operations
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A company prepares a bank reconciliation to - ✔✔Determine the correct amount of cash balance
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An inventory valuation method such as FIFO or LIFO affects - ✔✔Both the income statement
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and balance sheet
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A liability for dividends is recorded on what date? - ✔✔The declaration date
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Assets are classified as intangible under which of the following conditions? - ✔✔They have no
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physical substance ||




Return on assets help users of financial statements evaluate which of the following? -
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✔✔Profitability



What impact does collecting a receivable have? - ✔✔No impact on assets nor net income.
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The financial statement that includes classifications for operating, financing and investing
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activities of a business entity for a period of time is called: - ✔✔Statement of cash flows
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