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