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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. The estimation of business's net income in terms of accounting periods.
Adjusting entries NEVER affect..
Periodicity
Income Statement
Final Trial Balance
2. Customer buys a service - company pays an employee for service - company performs service
Liquidity
Stockholder's Equity
Events that are recorded as transactions
Footings
3. A 12 month accounting period (Vary depending on slack seasons)
Fiscal Year
Continuity Assumption
Steps for Income Summary Account
Stockholder's Equity =
4. 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)
Interim Periods
Recognizing Unrecorded Expenses (RUE)
Long term assets are..
Consignment Sale
5. 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
Cost Principle
Adjusted Trial Balance
Revenues are what to SE..
Accrual Accounting
6. Postponement of recognition of an expense already paid.
Deferral
Accrued revenues
Valuation
Accumulated Depreciation Accounts
7. The practice of recording transactions at exchange price at the point of recognition.
IASB
Allocating recorded costs between 2 or more accounting periods (ARC)
Dividends are what to SE
Cost Principle
8. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Depreciation
Accrual Accounting
SEC Requirements for transactions
Recognition Point
9. If you're having a bad year - to dump everything into something else like pensions
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10. Contains only balance sheet accounts.
Continuity Assumption
Final Trial Balance
IASB
Deferral
11. Sole worker of your business
Permanent Accounts (Real Accounts)
Sole proprietorship
Fiscal Year
Earnings Management
12. A net loss occurs
GASB
IASB
Adjusted Trial Balance
When expenses exceed revenues..
13. The manipulation of revenues and expenses to achieve a specific outcome.
Mutual Agency
Income Summary Account
Earnings Management
Accrued revenues
14. Revenues - Expenses
Fiscal Year
Stockholder's Equity
Cash Basis of Accounting
Net Income =
15. Their related asset accounts on the balance sheet
Operating Activities
Accumulated Depreciation accounts are deducted from..
Stockholder's Equity =
Allocating recorded costs between 2 or more accounting periods (ARC)
16. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Adjusted Trial Balance
GAAP
Fiscal Year
GASB
17. The difficulty of deciding when a business transaction should be recorded
Carrying Value
Recognition
Dividends are what to SE
Actuaries
18. People that estimate various things
Earnings Management
Sole proprietorship
Footings
Actuaries
19. A separate account that is paired with a related account
Revenues are what to SE..
Expenses are what to SE..
Contra Account
SEC Requirements for transactions
20. Working totals
Accumulated Depreciation Accounts
Recognizing unrecorded - earned revenues
Footings
Operating Activities
21. The net amount - or 'Book Value' of an asset
Carrying Value
Board of Directors
Revenues are what to SE..
Income Summary Account
22. 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.
Long term assets are..
Cash Basis of Accounting
Accumulated Depreciation Accounts
Valuation
23. It's usual balance and is the side (debit or credit) that increases the amount.
Normal Balance
Adjusting entries NEVER affect..
When expenses exceed revenues..
Accounting Equation
24. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Allocating recorded costs between 2 or more accounting periods (ARC)
Normal Balance
Accounting Equation
Net Income =
25. Increases
Revenues are what to SE..
Accrual Accounting
Adjusting entries NEVER affect..
GAAP
26. Determines corporate policy - declares dividends and appoints management.
Board of Directors
Earnings Management
When expenses exceed revenues..
Closing Entries
27. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Continuity
Revenues are what to SE..
Adjusting entries affect...
Recognizing Unrecorded Expenses (RUE)
28. The amount allocated to any one accounting period.
Recognizing Unrecorded Expenses (RUE)
Normal Balance
Depreciation
Balance Sheet
29. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Expenses are what to SE..
Valuation
Income Summary Account
Sole proprietorship
30. Cash account
Closing Entries
Adjusting entries affect...
Long term assets are..
Adjusting entries NEVER affect..
31. Payments received in advance - and deposits made on goods and services
Accrued Expenses
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Board of Directors
Steps for Income Summary Account
32. Match expenses with the revenues that they help generate - & vice versa.
Mutual Agency
Net Income =
Matching Rule
'Big Bath Theory'
33. Generally Accepted Accounting Principles - or guidelines for financial accounting.
SEC Requirements for transactions
GAAP
Consignment Sale
Accumulated Depreciation Accounts
34. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
Continuity
Going Concern
Interim Periods
35. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
Sole proprietorship
Accumulated Depreciation Accounts
Accrued Expenses
36. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Deferral
Post-closing trial balance
Not recorded as transactions
Periodicity
37. 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.
Footings
Earnings Management
Liquidity
Recognizing unrecorded - earned revenues
38. The predetermined time at which a transaction should be recorded.
Continuity
Securities Exchange Commission (SEC)
Recognition Point
Closing Entries
39. As an expense and the corresponding liability accumulate.
Accrued Expenses
We Recognize A Transaction
Deferral
Adjusted Trial Balance
40. Accounting periods of less than a year.
Permanent Accounts (Real Accounts)
Interim Periods
Statement of Retained Earnings:
Cash Basis of Accounting
41. 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
Periodicity
Matching Rule
Expenses are what to SE..
42. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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43. International Accounting Standards Board.
GAAP
IASB
When expenses exceed revenues..
Carrying Value
44. Accounting Equation
Accounting Equation
Adjusted Trial Balance
Income Summary Account
Interim Periods
45. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Carrying Value
'Big Bath Theory'
Securities Exchange Commission (SEC)
Continuity
46. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Steps for Income Summary Account
Adjusting entries affect...
Cost Principle
Accumulated Depreciation Accounts
47. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Income Summary Account
Board of Directors
Operating Activities
48. A temporary account that summarizes all revenues and expenses for the period.
Accrued Expenses
Accumulated Depreciation Accounts
Income Summary Account
Net Income =
49. Contributed Capital + Retained Earnings
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50. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrued revenues
Cash Basis of Accounting
IASB
Statement of Retained Earnings: