SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
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. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Closing Entries
Stockholder's Equity
FASB
Long term assets are..
2. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Footings
Income Summary Account
Permanent Accounts (Real Accounts)
Accrued Expenses
3. Revenues - Expenses
Net Income =
When expenses exceed revenues..
Income Summary Account
Stockholder's Equity
4. People that estimate various things
Corporations
Recognition Point
Accrued Expenses
Actuaries
5. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
GASB
We Recognize A Transaction
Actuaries
Valuation Issue
6. Determines corporate policy - declares dividends and appoints management.
Board of Directors
Closing Entries
Valuation
Allocating recorded costs between 2 or more accounting periods (ARC)
7. Deferral of an expense! (Except land)
Securities Exchange Commission (SEC)
Valuation Issue
Statement of Retained Earnings:
Long term assets are..
8. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrued revenues
Recognizing Unrecorded Expenses (RUE)
Stockholder's Equity =
Dividends are what to SE
9. The difficulty of deciding when a business transaction should be recorded
Expenses are what to SE..
Consignment Sale
Sole proprietorship
Recognition
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
Matching Rule
Closing Entries
Adjusting entries affect...
Contra Account
11. Contributed Capital + Retained Earnings
12. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Mutual Agency
Final Trial Balance
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
SEC Requirements for transactions
13. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Valuation
Normal Balance
Stockholder's Equity
Consignment Sale
14. The amount allocated to any one accounting period.
Depreciation
Securities Exchange Commission (SEC)
We Recognize A Transaction
GASB
15. Used to accumulate the depreciation on each long-term asset
Accumulated Depreciation Accounts
Liquidity
Recognizing unrecorded - earned revenues
'Big Bath Theory'
16. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Sole proprietorship
Stockholder's Equity
Mutual Agency
Revenues are what to SE..
17. Working totals
Continuity Assumption
Expenses are what to SE..
Recognition Point
Footings
18. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Corporations
Not recorded as transactions
Accrued Expenses
Dividends are what to SE
19. 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)
When expenses exceed revenues..
We Recognize A Transaction
Dividends are what to SE
Consignment Sale
20. The estimation of business's net income in terms of accounting periods.
Periodicity
Cost Principle
Valuation
Stockholder's Equity
21. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Corporations
Steps for Income Summary Account
Expenses are what to SE..
Stockholder's Equity =
22. Payments received in advance - and deposits made on goods and services
Cash Basis of Accounting
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Expenses are what to SE..
Operating Activities
23. Increases
Revenues are what to SE..
Statement of Retained Earnings:
Recognizing Unrecorded Expenses (RUE)
Long term assets are..
24. Choosing the number of accounting periods
Continuity
Fiscal Year
Final Trial Balance
Stockholder's Equity =
25. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
SEC Requirements for transactions
Stockholder's Equity =
Accumulated Depreciation accounts are deducted from..
26. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Operating Activities
Valuation
Valuation Issue
Steps for Income Summary Account
27. A temporary account that summarizes all revenues and expenses for the period.
Balance Sheet
Continuity
Steps for Income Summary Account
Income Summary Account
28. Customer buys a service - company pays an employee for service - company performs service
Board of Directors
Recognition Point
Events that are recorded as transactions
Accrual Accounting
29. 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.
Recognizing unrecorded - earned revenues
Adjusting entries NEVER affect..
Steps for Income Summary Account
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
30. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Steps for Income Summary Account
Recognizing unrecorded - earned revenues
We Recognize A Transaction
'Big Bath Theory'
31. The practice of recording transactions at exchange price at the point of recognition.
GASB
Accrued Expenses
Cost Principle
Liquidity
32. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Allocating recorded costs between 2 or more accounting periods (ARC)
Earnings Management
Adjusting entries affect...
Interim Periods
33. The manipulation of revenues and expenses to achieve a specific outcome.
Earnings Management
Allocating recorded costs between 2 or more accounting periods (ARC)
Contra Account
Consignment Sale
34. If you're having a bad year - to dump everything into something else like pensions
35. Lists all accounts and their balances
Recognizing unrecorded - earned revenues
Adjusted Trial Balance
Valuation Issue
Continuity Assumption
36. Accounting Equation
Accounting Equation
Continuity
Contra Account
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
37. The predetermined time at which a transaction should be recorded.
Steps for Income Summary Account
Recognition Point
Fiscal Year
Liquidity
38. Accounting periods of less than a year.
Closing Entries
Continuity Assumption
Interim Periods
Fiscal Year
39. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Deferral
Board of Directors
Continuity Assumption
Accumulated Depreciation Accounts
40. Decreases
Corporations
Income Statement
Dividends are what to SE
Footings
41. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Balance Sheet
Accumulated Depreciation accounts are deducted from..
We Recognize A Transaction
42. Contains only balance sheet accounts.
Accrued revenues
Stockholder's Equity =
Consignment Sale
Final Trial Balance
43. The net amount - or 'Book Value' of an asset
Adjusting entries affect...
Continuity
Operating Activities
Carrying Value
44. Sole worker of your business
Sole proprietorship
Contra Account
Allocating recorded costs between 2 or more accounting periods (ARC)
Footings
45. A 12 month accounting period (Vary depending on slack seasons)
Valuation Issue
Earnings Management
Cost Principle
Fiscal Year
46. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
FASB
Continuity Assumption
Accounting Equation
47. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Periodicity
Footings
GAAP
Final Trial Balance
48. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
GAAP
Recognizing unrecorded - earned revenues
Recognizing Unrecorded Expenses (RUE)
Steps for Income Summary Account
49. It's usual balance and is the side (debit or credit) that increases the amount.
Deferral
Contra Account
Normal Balance
Stockholder's Equity
50. Selling goods and services to customers - employing managers and workers.
Footings
Adjusting entries NEVER affect..
Operating Activities
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)