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