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CLEP Financial Accounting
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Subjects
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clep
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Steps for Income Summary Account
Adjusting entries affect...
When expenses exceed revenues..
Adjusted Trial Balance
2. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Cost Principle
FASB
Mutual Agency
Board of Directors
3. Their related asset accounts on the balance sheet
Accumulated Depreciation Accounts
Depreciation
Liquidity
Accumulated Depreciation accounts are deducted from..
4. Selling goods and services to customers - employing managers and workers.
Continuity Assumption
Accrual Accounting
GAAP
Operating Activities
5. A 12 month accounting period (Vary depending on slack seasons)
Fiscal Year
Recognizing unrecorded - earned revenues
Dividends are what to SE
'Big Bath Theory'
6. The manipulation of revenues and expenses to achieve a specific outcome.
GAAP
Accounting Equation
Earnings Management
Net Income =
7. 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
Closing Entries
Stockholder's Equity
Accrued revenues
Allocating recorded costs between 2 or more accounting periods (ARC)
8. People that estimate various things
Actuaries
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Consignment Sale
Periodicity
9. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Actuaries
Footings
Stockholder's Equity
10. Contains only balance sheet accounts.
Accrual Accounting
Final Trial Balance
Expenses are what to SE..
Not recorded as transactions
11. A net loss occurs
GAAP
Balance Sheet
Not recorded as transactions
When expenses exceed revenues..
12. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Adjusted Trial Balance
Corporations
Periodicity
Accrual Accounting
13. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Valuation
SEC Requirements for transactions
Events that are recorded as transactions
Net Income =
14. The net amount - or 'Book Value' of an asset
Liquidity
Accrued revenues
Valuation
Carrying Value
15. 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.
Cash Basis of Accounting
Continuity
Recognition Point
Continuity Assumption
16. A separate account that is paired with a related account
Operating Activities
Adjusting entries affect...
Closing Entries
Contra Account
17. Sole worker of your business
Carrying Value
Accumulated Depreciation accounts are deducted from..
We Recognize A Transaction
Sole proprietorship
18. It's usual balance and is the side (debit or credit) that increases the amount.
Adjusted Trial Balance
Normal Balance
Stockholder's Equity
Sole proprietorship
19. Accounting Equation
Adjusting entries affect...
Recognizing Unrecorded Expenses (RUE)
Accounting Equation
Post-closing trial balance
20. Postponement of recognition of an expense already paid.
Final Trial Balance
Deferral
Continuity
Events that are recorded as transactions
21. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
Stockholder's Equity =
Interim Periods
Allocating recorded costs between 2 or more accounting periods (ARC)
22. As an expense and the corresponding liability accumulate.
Post-closing trial balance
Accrued Expenses
Stockholder's Equity
Expenses are what to SE..
23. Payments received in advance - and deposits made on goods and services
We Recognize A Transaction
Valuation Issue
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Securities Exchange Commission (SEC)
24. Revenues that a company has earned but for which no entry has been made in the accounting records
Sole proprietorship
Accrued revenues
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
'Big Bath Theory'
25. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
GASB
Recognition
Stockholder's Equity
Accrued revenues
26. The predetermined time at which a transaction should be recorded.
Continuity Assumption
Periodicity
Recognition Point
Stockholder's Equity
27. Choosing the number of accounting periods
Recognition Point
Final Trial Balance
Continuity
'Big Bath Theory'
28. 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
IASB
Income Statement
Mutual Agency
29. 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
Cost Principle
Income Statement
GAAP
Fiscal Year
30. Match expenses with the revenues that they help generate - & vice versa.
Matching Rule
Dividends are what to SE
Accounting Equation
Interim Periods
31. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Steps for Income Summary Account
Income Summary Account
Permanent Accounts (Real Accounts)
32. If you're having a bad year - to dump everything into something else like pensions
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33. The estimation of business's net income in terms of accounting periods.
Valuation Issue
SEC Requirements for transactions
When expenses exceed revenues..
Periodicity
34. Generally Accepted Accounting Principles - or guidelines for financial accounting.
GAAP
Interim Periods
Accounting Equation
Liquidity
35. Determines corporate policy - declares dividends and appoints management.
Contra Account
Board of Directors
Steps for Income Summary Account
Accumulated Depreciation Accounts
36. Customer buys a service - company pays an employee for service - company performs service
Recognizing unrecorded - earned revenues
Events that are recorded as transactions
Recognition Point
Accumulated Depreciation Accounts
37. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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38. A temporary account that summarizes all revenues and expenses for the period.
Deferral
Valuation
Income Summary Account
Matching Rule
39. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Recognition
Mutual Agency
Valuation
Steps for Income Summary Account
40. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Earnings Management
GASB
Valuation Issue
Going Concern
41. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
When expenses exceed revenues..
Steps for Income Summary Account
Carrying Value
Securities Exchange Commission (SEC)
42. Decreases
Allocating recorded costs between 2 or more accounting periods (ARC)
GASB
Expenses are what to SE..
Accrued revenues
43. Used to accumulate the depreciation on each long-term asset
Accrual Accounting
SEC Requirements for transactions
Accumulated Depreciation Accounts
Earnings Management
44. Lists all accounts and their balances
Consignment Sale
Adjusted Trial Balance
Carrying Value
Income Statement
45. Decreases
Adjusting entries NEVER affect..
Valuation Issue
Dividends are what to SE
Interim Periods
46. 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
Going Concern
Accrual Accounting
When expenses exceed revenues..
Income Summary Account
47. Deferral of an expense! (Except land)
Board of Directors
Footings
Long term assets are..
Fiscal Year
48. The difficulty of deciding when a business transaction should be recorded
Accumulated Depreciation Accounts
Post-closing trial balance
Cash Basis of Accounting
Recognition
49. International Accounting Standards Board.
IASB
Recognition
Net Income =
Stockholder's Equity
50. The amount allocated to any one accounting period.
Depreciation
Balance Sheet
Corporations
Income Statement
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