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