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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. Determines corporate policy - declares dividends and appoints management.
Steps for Income Summary Account
GASB
Operating Activities
Board of Directors
2. Decreases
Stockholder's Equity
Accrued Expenses
When expenses exceed revenues..
Dividends are what to SE
3. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Events that are recorded as transactions
Deferral
Continuity Assumption
Carrying Value
4. Postponement of recognition of an expense already paid.
GAAP
SEC Requirements for transactions
GASB
Deferral
5. The estimation of business's net income in terms of accounting periods.
Periodicity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Liquidity
Adjusting entries affect...
6. Used to accumulate the depreciation on each long-term asset
Accumulated Depreciation Accounts
Not recorded as transactions
Steps for Income Summary Account
Mutual Agency
7. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Recognition Point
Liquidity
Not recorded as transactions
Stockholder's Equity =
8. A temporary account that summarizes all revenues and expenses for the period.
Income Summary Account
Accounting Equation
Expenses are what to SE..
Interim Periods
9. International Accounting Standards Board.
Accrued revenues
Continuity
Not recorded as transactions
IASB
10. Choosing the number of accounting periods
Continuity
Deferral
Net Income =
Stockholder's Equity
11. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Cash Basis of Accounting
Steps for Income Summary Account
Mutual Agency
Normal Balance
12. Their related asset accounts on the balance sheet
Revenues are what to SE..
Continuity
Steps for Income Summary Account
Accumulated Depreciation accounts are deducted from..
13. It's usual balance and is the side (debit or credit) that increases the amount.
Net Income =
Going Concern
Consignment Sale
Normal Balance
14. The manipulation of revenues and expenses to achieve a specific outcome.
Consignment Sale
Accrued revenues
Earnings Management
Accrued Expenses
15. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Consignment Sale
Statement of Retained Earnings:
FASB
Deferral
16. The amount allocated to any one accounting period.
Normal Balance
Depreciation
Corporations
Stockholder's Equity
17. A separate account that is paired with a related account
Contra Account
We Recognize A Transaction
Footings
'Big Bath Theory'
18. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Final Trial Balance
Valuation Issue
Valuation
Fiscal Year
19. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Expenses are what to SE..
Permanent Accounts (Real Accounts)
Closing Entries
Accrual Accounting
20. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Steps for Income Summary Account
Cost Principle
Allocating recorded costs between 2 or more accounting periods (ARC)
Cash Basis of Accounting
21. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Expenses are what to SE..
Post-closing trial balance
Valuation
Revenues are what to SE..
22. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Allocating recorded costs between 2 or more accounting periods (ARC)
Actuaries
Cash Basis of Accounting
Accrual Accounting
23. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
'Big Bath Theory'
Fiscal Year
Recognizing Unrecorded Expenses (RUE)
Footings
24. A 12 month accounting period (Vary depending on slack seasons)
Fiscal Year
Closing Entries
Deferral
Final Trial Balance
25. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Consignment Sale
Accrual Accounting
Corporations
Post-closing trial balance
26. Contains only balance sheet accounts.
Depreciation
We Recognize A Transaction
Final Trial Balance
Board of Directors
27. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Footings
FASB
Matching Rule
28. 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
Deferral
Accrual Accounting
Closing Entries
Revenues are what to SE..
29. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Income Statement
Revenues are what to SE..
Depreciation
Securities Exchange Commission (SEC)
30. The predetermined time at which a transaction should be recorded.
Allocating recorded costs between 2 or more accounting periods (ARC)
Recognition Point
Income Summary Account
Periodicity
31. Working totals
Corporations
Operating Activities
Footings
Consignment Sale
32. The difficulty of deciding when a business transaction should be recorded
Continuity
Recognition
Fiscal Year
Net Income =
33. Selling goods and services to customers - employing managers and workers.
Accounting Equation
Consignment Sale
Contra Account
Operating Activities
34. Cash account
Adjusting entries NEVER affect..
Cost Principle
Cash Basis of Accounting
GAAP
35. Shows the changes in RE over an accounting period.
Recognition Point
Statement of Retained Earnings:
Cost Principle
Valuation
36. Sole worker of your business
Securities Exchange Commission (SEC)
Sole proprietorship
Fiscal Year
Accounting Equation
37. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Footings
Accrued Expenses
Accounting Equation
38. 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)
Normal Balance
Consignment Sale
GAAP
IASB
39. Accounting periods of less than a year.
Permanent Accounts (Real Accounts)
Interim Periods
Dividends are what to SE
Corporations
40. If you're having a bad year - to dump everything into something else like pensions
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41. A net loss occurs
Carrying Value
When expenses exceed revenues..
Normal Balance
Fiscal Year
42. Revenues that a company has earned but for which no entry has been made in the accounting records
Income Statement
Income Summary Account
Accrued revenues
Operating Activities
43. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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44. Accounting Equation
Accounting Equation
Mutual Agency
Earnings Management
Matching Rule
45. Lists all accounts and their balances
Adjusted Trial Balance
Net Income =
Valuation
Accounting Equation
46. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Going Concern
Stockholder's Equity =
GAAP
Consignment Sale
47. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Accrued revenues
Consignment Sale
Going Concern
GAAP
48. 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
Steps for Income Summary Account
Deferral
Accumulated Depreciation Accounts
Accrual Accounting
49. 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.
Recognition Point
Securities Exchange Commission (SEC)
Events that are recorded as transactions
Recognizing unrecorded - earned revenues
50. Revenues - Expenses
Adjusting entries affect...
Income Statement
Continuity
Net Income =