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Test your basic knowledge |
CLEP Financial Accounting
Start Test
Study First
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. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Mutual Agency
Valuation
Stockholder's Equity
Operating Activities
2. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Income Summary Account
Steps for Income Summary Account
Revenues are what to SE..
3. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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4. 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
Closing Entries
Accumulated Depreciation Accounts
Mutual Agency
Accrued Expenses
5. Sole worker of your business
Securities Exchange Commission (SEC)
Sole proprietorship
Board of Directors
Final Trial Balance
6. Accounting periods of less than a year.
Interim Periods
Income Summary Account
Fiscal Year
Post-closing trial balance
7. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Normal Balance
Accumulated Depreciation Accounts
Permanent Accounts (Real Accounts)
Valuation Issue
8. The difficulty of deciding when a business transaction should be recorded
GAAP
Periodicity
Revenues are what to SE..
Recognition
9. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Steps for Income Summary Account
Securities Exchange Commission (SEC)
Liquidity
Normal Balance
10. As an expense and the corresponding liability accumulate.
Securities Exchange Commission (SEC)
Matching Rule
Accrued Expenses
Steps for Income Summary Account
11. 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
Operating Activities
Income Statement
Accounting Equation
Adjusting entries NEVER affect..
12. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Accrual Accounting
Steps for Income Summary Account
Permanent Accounts (Real Accounts)
Carrying Value
13. Decreases
Income Summary Account
Accumulated Depreciation Accounts
IASB
Dividends are what to SE
14. Decreases
Expenses are what to SE..
Footings
When expenses exceed revenues..
Liquidity
15. 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.
Final Trial Balance
Revenues are what to SE..
Cash Basis of Accounting
Closing Entries
16. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Accumulated Depreciation Accounts
Steps for Income Summary Account
Valuation
Permanent Accounts (Real Accounts)
17. Choosing the number of accounting periods
Continuity
Valuation Issue
Liquidity
Sole proprietorship
18. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Recognizing Unrecorded Expenses (RUE)
Recognition Point
Mutual Agency
19. Match expenses with the revenues that they help generate - & vice versa.
Allocating recorded costs between 2 or more accounting periods (ARC)
Accrued revenues
Expenses are what to SE..
Matching Rule
20. It's usual balance and is the side (debit or credit) that increases the amount.
Accounting Equation
Expenses are what to SE..
Recognition Point
Normal Balance
21. Revenues - Expenses
Deferral
Net Income =
Adjusted Trial Balance
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
22. Increases
Fiscal Year
SEC Requirements for transactions
Revenues are what to SE..
Normal Balance
23. The manipulation of revenues and expenses to achieve a specific outcome.
Events that are recorded as transactions
Earnings Management
Fiscal Year
Board of Directors
24. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
GASB
Mutual Agency
Dividends are what to SE
Matching Rule
25. People that estimate various things
Dividends are what to SE
Expenses are what to SE..
Events that are recorded as transactions
Actuaries
26. Their related asset accounts on the balance sheet
Accrual Accounting
Accumulated Depreciation Accounts
Accumulated Depreciation accounts are deducted from..
Expenses are what to SE..
27. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
We Recognize A Transaction
Long term assets are..
Periodicity
FASB
28. The estimation of business's net income in terms of accounting periods.
Steps for Income Summary Account
Valuation Issue
Income Summary Account
Periodicity
29. International Accounting Standards Board.
Income Summary Account
Recognition
IASB
Accumulated Depreciation accounts are deducted from..
30. The amount allocated to any one accounting period.
Depreciation
Normal Balance
GASB
Final Trial Balance
31. Cash account
Adjusting entries NEVER affect..
Matching Rule
SEC Requirements for transactions
Dividends are what to SE
32. A net loss occurs
Accrual Accounting
Going Concern
When expenses exceed revenues..
GASB
33. Contributed Capital + Retained Earnings
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34. A temporary account that summarizes all revenues and expenses for the period.
Steps for Income Summary Account
Fiscal Year
Income Summary Account
Final Trial Balance
35. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
GASB
Accumulated Depreciation Accounts
Consignment Sale
Going Concern
36. Working totals
Operating Activities
Expenses are what to SE..
Footings
Earnings Management
37. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Footings
Continuity Assumption
Earnings Management
Accumulated Depreciation accounts are deducted from..
38. Postponement of recognition of an expense already paid.
Statement of Retained Earnings:
Allocating recorded costs between 2 or more accounting periods (ARC)
Accrued Expenses
Deferral
39. 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.
Net Income =
Recognizing unrecorded - earned revenues
Accounting Equation
Final Trial Balance
40. The net amount - or 'Book Value' of an asset
Carrying Value
Periodicity
GASB
GAAP
41. Contains only balance sheet accounts.
Adjusting entries NEVER affect..
Final Trial Balance
Accumulated Depreciation Accounts
Accrual Accounting
42. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
FASB
Not recorded as transactions
Cash Basis of Accounting
Footings
43. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Accumulated Depreciation Accounts
SEC Requirements for transactions
Interim Periods
Net Income =
44. Customer buys a service - company pays an employee for service - company performs service
Earnings Management
Deferral
Events that are recorded as transactions
Securities Exchange Commission (SEC)
45. Determines corporate policy - declares dividends and appoints management.
Board of Directors
Revenues are what to SE..
Closing Entries
Accrual Accounting
46. Lists all accounts and their balances
Mutual Agency
Adjusted Trial Balance
SEC Requirements for transactions
Deferral
47. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
Matching Rule
Operating Activities
Stockholder's Equity =
48. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Footings
Cost Principle
Sole proprietorship
Balance Sheet
49. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Adjusted Trial Balance
Accounting Equation
Continuity Assumption
Corporations
50. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Income Summary Account
Net Income =
Liquidity
Going Concern