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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. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Accrual Accounting
Allocating recorded costs between 2 or more accounting periods (ARC)
Closing Entries
Carrying Value
2. Contributed Capital + Retained Earnings
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3. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Recognition Point
Post-closing trial balance
Mutual Agency
SEC Requirements for transactions
4. Determines corporate policy - declares dividends and appoints management.
Earnings Management
Board of Directors
Income Statement
Revenues are what to SE..
5. Cash account
Not recorded as transactions
Continuity
When expenses exceed revenues..
Adjusting entries NEVER affect..
6. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Mutual Agency
Cash Basis of Accounting
Contra Account
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
7. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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8. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Securities Exchange Commission (SEC)
Events that are recorded as transactions
Cash Basis of Accounting
Continuity
9. Postponement of recognition of an expense already paid.
Continuity Assumption
Post-closing trial balance
Deferral
GASB
10. Contains only balance sheet accounts.
Valuation Issue
Final Trial Balance
Dividends are what to SE
We Recognize A Transaction
11. 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
Cash Basis of Accounting
Closing Entries
Sole proprietorship
IASB
12. Increases
Actuaries
Recognizing Unrecorded Expenses (RUE)
Going Concern
Revenues are what to SE..
13. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Post-closing trial balance
Accumulated Depreciation Accounts
'Big Bath Theory'
Footings
14. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Statement of Retained Earnings:
Stockholder's Equity =
Valuation Issue
Balance Sheet
15. 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)
Liquidity
Periodicity
Sole proprietorship
Consignment Sale
16. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Statement of Retained Earnings:
Not recorded as transactions
Recognizing Unrecorded Expenses (RUE)
Deferral
17. 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
Allocating recorded costs between 2 or more accounting periods (ARC)
Sole proprietorship
Normal Balance
Accrual Accounting
18. Decreases
Contra Account
Expenses are what to SE..
Balance Sheet
Adjusting entries affect...
19. As an expense and the corresponding liability accumulate.
Income Summary Account
Accrued Expenses
Earnings Management
Long term assets are..
20. It's usual balance and is the side (debit or credit) that increases the amount.
Normal Balance
Net Income =
Accumulated Depreciation Accounts
Accrual Accounting
21. Choosing the number of accounting periods
Accumulated Depreciation Accounts
Expenses are what to SE..
Going Concern
Continuity
22. Sole worker of your business
Accrual Accounting
Accrued revenues
Accumulated Depreciation accounts are deducted from..
Sole proprietorship
23. Accounting periods of less than a year.
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Adjusting entries affect...
Securities Exchange Commission (SEC)
Interim Periods
24. Their related asset accounts on the balance sheet
Accumulated Depreciation accounts are deducted from..
Actuaries
Contra Account
IASB
25. Used to accumulate the depreciation on each long-term asset
Net Income =
Allocating recorded costs between 2 or more accounting periods (ARC)
Stockholder's Equity
Accumulated Depreciation Accounts
26. Payments received in advance - and deposits made on goods and services
Deferral
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
GASB
Consignment Sale
27. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Going Concern
Steps for Income Summary Account
Earnings Management
28. The ability to have enough cash to pay debts when they are due.
Liquidity
Permanent Accounts (Real Accounts)
Adjusting entries affect...
Contra Account
29. Working totals
Depreciation
Footings
Consignment Sale
Carrying Value
30. People that estimate various things
Events that are recorded as transactions
Liquidity
Actuaries
Post-closing trial balance
31. 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
Liquidity
Accounting Equation
Going Concern
Income Statement
32. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Steps for Income Summary Account
Fiscal Year
GASB
Consignment Sale
33. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Accrual Accounting
Corporations
Depreciation
Valuation Issue
34. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
Permanent Accounts (Real Accounts)
Steps for Income Summary Account
Adjusted Trial Balance
35. 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.
Cash Basis of Accounting
Matching Rule
We Recognize A Transaction
Not recorded as transactions
36. Match expenses with the revenues that they help generate - & vice versa.
Valuation
Accumulated Depreciation Accounts
Final Trial Balance
Matching Rule
37. A separate account that is paired with a related account
Steps for Income Summary Account
Contra Account
Consignment Sale
Cash Basis of Accounting
38. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Accrued revenues
Operating Activities
FASB
Revenues are what to SE..
39. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Income Summary Account
Valuation
Final Trial Balance
Long term assets are..
40. Revenues that a company has earned but for which no entry has been made in the accounting records
Corporations
Accrued revenues
Accounting Equation
Revenues are what to SE..
41. Revenues - Expenses
Steps for Income Summary Account
Recognition
Net Income =
SEC Requirements for transactions
42. A temporary account that summarizes all revenues and expenses for the period.
Income Summary Account
FASB
Events that are recorded as transactions
Footings
43. Selling goods and services to customers - employing managers and workers.
Securities Exchange Commission (SEC)
When expenses exceed revenues..
Permanent Accounts (Real Accounts)
Operating Activities
44. A 12 month accounting period (Vary depending on slack seasons)
Consignment Sale
Balance Sheet
Continuity Assumption
Fiscal Year
45. The estimation of business's net income in terms of accounting periods.
Periodicity
Recognition
Income Summary Account
Securities Exchange Commission (SEC)
46. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
FASB
Final Trial Balance
Actuaries
47. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Steps for Income Summary Account
Fiscal Year
IASB
48. The net amount - or 'Book Value' of an asset
SEC Requirements for transactions
Carrying Value
Allocating recorded costs between 2 or more accounting periods (ARC)
Contra Account
49. Deferral of an expense! (Except land)
Long term assets are..
GAAP
Going Concern
Recognition Point
50. A net loss occurs
Cash Basis of Accounting
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
When expenses exceed revenues..
Interim Periods