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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. Generally Accepted Accounting Principles - or guidelines for financial accounting.
GAAP
GASB
Valuation
IASB
2. The estimation of business's net income in terms of accounting periods.
Periodicity
FASB
Stockholder's Equity
Actuaries
3. A separate account that is paired with a related account
SEC Requirements for transactions
Contra Account
Allocating recorded costs between 2 or more accounting periods (ARC)
Closing Entries
4. Revenues - Expenses
IASB
We Recognize A Transaction
Net Income =
Corporations
5. Sole worker of your business
Sole proprietorship
Cash Basis of Accounting
Normal Balance
Accounting Equation
6. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
7. The manipulation of revenues and expenses to achieve a specific outcome.
Deferral
Cash Basis of Accounting
Earnings Management
Income Statement
8. 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.
Accumulated Depreciation Accounts
Cash Basis of Accounting
Recognition Point
Accumulated Depreciation accounts are deducted from..
9. Shows the changes in RE over an accounting period.
Valuation Issue
Recognizing unrecorded - earned revenues
Statement of Retained Earnings:
Adjusting entries NEVER affect..
10. Their related asset accounts on the balance sheet
Recognition Point
Accumulated Depreciation accounts are deducted from..
Periodicity
Stockholder's Equity
11. The difficulty of deciding when a business transaction should be recorded
Depreciation
Recognition
Not recorded as transactions
Corporations
12. Match expenses with the revenues that they help generate - & vice versa.
Depreciation
Matching Rule
Deferral
Accrued Expenses
13. People that estimate various things
Going Concern
Stockholder's Equity
Accounting Equation
Actuaries
14. 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
Accrual Accounting
Accumulated Depreciation accounts are deducted from..
Balance Sheet
Income Summary Account
15. Used to accumulate the depreciation on each long-term asset
Dividends are what to SE
Continuity Assumption
Accumulated Depreciation Accounts
Recognition
16. A 12 month accounting period (Vary depending on slack seasons)
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Normal Balance
Fiscal Year
Cost Principle
17. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Recognition
Liquidity
Valuation
Income Summary Account
18. Contains only balance sheet accounts.
Recognizing Unrecorded Expenses (RUE)
Final Trial Balance
Post-closing trial balance
Mutual Agency
19. The net amount - or 'Book Value' of an asset
Deferral
Liquidity
Adjusted Trial Balance
Carrying Value
20. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Balance Sheet
Accounting Equation
Events that are recorded as transactions
GASB
21. Contributed Capital + Retained Earnings
22. Lists all accounts and their balances
Expenses are what to SE..
Statement of Retained Earnings:
Revenues are what to SE..
Adjusted Trial Balance
23. Working totals
Footings
Recognition Point
Permanent Accounts (Real Accounts)
Adjusting entries NEVER affect..
24. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Cost Principle
Recognition Point
Mutual Agency
Sole proprietorship
25. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Statement of Retained Earnings:
Valuation Issue
Actuaries
Securities Exchange Commission (SEC)
26. Accounting Equation
When expenses exceed revenues..
Accounting Equation
Adjusted Trial Balance
Actuaries
27. A temporary account that summarizes all revenues and expenses for the period.
We Recognize A Transaction
FASB
Long term assets are..
Income Summary Account
28. Customer buys a service - company pays an employee for service - company performs service
FASB
Events that are recorded as transactions
Net Income =
Recognizing Unrecorded Expenses (RUE)
29. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Adjusted Trial Balance
Post-closing trial balance
Allocating recorded costs between 2 or more accounting periods (ARC)
Accounting Equation
30. As an expense and the corresponding liability accumulate.
Earnings Management
IASB
Accrued Expenses
'Big Bath Theory'
31. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Adjusting entries NEVER affect..
Balance Sheet
Steps for Income Summary Account
Accrued Expenses
32. Cash account
Continuity Assumption
Final Trial Balance
Accrued Expenses
Adjusting entries NEVER affect..
33. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Securities Exchange Commission (SEC)
We Recognize A Transaction
Continuity Assumption
Contra Account
34. Decreases
Going Concern
Actuaries
GASB
Expenses are what to SE..
35. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Periodicity
Permanent Accounts (Real Accounts)
Accumulated Depreciation accounts are deducted from..
Actuaries
36. Accounting periods of less than a year.
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Periodicity
Recognizing unrecorded - earned revenues
Interim Periods
37. Postponement of recognition of an expense already paid.
Balance Sheet
When expenses exceed revenues..
Post-closing trial balance
Deferral
38. The amount allocated to any one accounting period.
SEC Requirements for transactions
Post-closing trial balance
Valuation Issue
Depreciation
39. Payments received in advance - and deposits made on goods and services
Dividends are what to SE
Net Income =
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Income Statement
40. 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
Income Statement
Accounting Equation
Recognition
Net Income =
41. The practice of recording transactions at exchange price at the point of recognition.
SEC Requirements for transactions
Accrued revenues
Events that are recorded as transactions
Cost Principle
42. Increases
Going Concern
Revenues are what to SE..
Board of Directors
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
43. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Permanent Accounts (Real Accounts)
Balance Sheet
Adjusting entries affect...
FASB
44. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Revenues are what to SE..
Corporations
Continuity Assumption
GASB
45. Choosing the number of accounting periods
Recognizing Unrecorded Expenses (RUE)
Going Concern
Continuity
When expenses exceed revenues..
46. 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.
Stockholder's Equity
Recognizing unrecorded - earned revenues
Adjusting entries NEVER affect..
Income Summary Account
47. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Not recorded as transactions
Corporations
Fiscal Year
Deferral
48. Deferral of an expense! (Except land)
Deferral
Post-closing trial balance
Long term assets are..
Recognizing unrecorded - earned revenues
49. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Recognition Point
Accrued Expenses
Adjusting entries affect...
GAAP
50. It's usual balance and is the side (debit or credit) that increases the amount.
Depreciation
Adjusting entries affect...
Normal Balance
Events that are recorded as transactions