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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. Determines corporate policy - declares dividends and appoints management.
Balance Sheet
Stockholder's Equity
Accumulated Depreciation Accounts
Board of Directors
2. 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)
Consignment Sale
Dividends are what to SE
Cost Principle
Contra Account
3. Payments received in advance - and deposits made on goods and services
When expenses exceed revenues..
Recognizing Unrecorded Expenses (RUE)
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Accrued Expenses
4. Match expenses with the revenues that they help generate - & vice versa.
Mutual Agency
Operating Activities
Matching Rule
Contra Account
5. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrued revenues
Recognizing unrecorded - earned revenues
Liquidity
Corporations
6. 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
Footings
Securities Exchange Commission (SEC)
Sole proprietorship
7. The net amount - or 'Book Value' of an asset
Carrying Value
Operating Activities
When expenses exceed revenues..
Accrued revenues
8. Postponement of recognition of an expense already paid.
Income Summary Account
Adjusted Trial Balance
Deferral
Closing Entries
9. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Dividends are what to SE
Matching Rule
Footings
Adjusting entries affect...
10. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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11. A separate account that is paired with a related account
Revenues are what to SE..
Recognizing unrecorded - earned revenues
Income Statement
Contra Account
12. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Continuity Assumption
Earnings Management
Depreciation
SEC Requirements for transactions
13. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Income Statement
Steps for Income Summary Account
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognizing Unrecorded Expenses (RUE)
14. It's usual balance and is the side (debit or credit) that increases the amount.
When expenses exceed revenues..
Normal Balance
GASB
FASB
15. Revenues - Expenses
Actuaries
Net Income =
Adjusting entries NEVER affect..
Going Concern
16. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Adjusted Trial Balance
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Allocating recorded costs between 2 or more accounting periods (ARC)
Valuation Issue
17. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Operating Activities
Income Summary Account
Allocating recorded costs between 2 or more accounting periods (ARC)
18. Increases
Valuation
Revenues are what to SE..
Actuaries
Deferral
19. The amount allocated to any one accounting period.
Depreciation
Earnings Management
Operating Activities
Cost Principle
20. Lists all accounts and their balances
GAAP
Adjusted Trial Balance
Valuation
Statement of Retained Earnings:
21. Deferral of an expense! (Except land)
Income Summary Account
Statement of Retained Earnings:
Long term assets are..
Adjusted Trial Balance
22. The ability to have enough cash to pay debts when they are due.
Post-closing trial balance
Liquidity
Periodicity
When expenses exceed revenues..
23. As an expense and the corresponding liability accumulate.
Accrued revenues
Accrued Expenses
GAAP
Recognition Point
24. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Board of Directors
Corporations
Adjusting entries affect...
25. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Valuation Issue
Allocating recorded costs between 2 or more accounting periods (ARC)
Accrual Accounting
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
26. People that estimate various things
Permanent Accounts (Real Accounts)
Valuation Issue
'Big Bath Theory'
Actuaries
27. International Accounting Standards Board.
Securities Exchange Commission (SEC)
'Big Bath Theory'
IASB
Post-closing trial balance
28. Sole worker of your business
Accumulated Depreciation Accounts
IASB
Sole proprietorship
Periodicity
29. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Carrying Value
Going Concern
Steps for Income Summary Account
FASB
30. Decreases
Earnings Management
Consignment Sale
Actuaries
Expenses are what to SE..
31. Decreases
Long term assets are..
Dividends are what to SE
Contra Account
Steps for Income Summary Account
32. Shows the changes in RE over an accounting period.
Securities Exchange Commission (SEC)
Depreciation
Deferral
Statement of Retained Earnings:
33. The difficulty of deciding when a business transaction should be recorded
Recognition Point
Recognition
Sole proprietorship
Continuity
34. Accounting periods of less than a year.
Actuaries
Interim Periods
GAAP
Permanent Accounts (Real Accounts)
35. Accounting Equation
Interim Periods
Accounting Equation
Stockholder's Equity
Going Concern
36. Contributed Capital + Retained Earnings
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37. The manipulation of revenues and expenses to achieve a specific outcome.
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Earnings Management
Adjusting entries affect...
Sole proprietorship
38. 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
Corporations
Income Summary Account
Accrued Expenses
Accrual Accounting
39. A net loss occurs
Corporations
Fiscal Year
When expenses exceed revenues..
Closing Entries
40. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Adjusting entries affect...
Corporations
Continuity
Recognition Point
41. Selling goods and services to customers - employing managers and workers.
GAAP
Accrual Accounting
Operating Activities
When expenses exceed revenues..
42. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
SEC Requirements for transactions
Dividends are what to SE
Liquidity
43. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Valuation
Adjusting entries affect...
We Recognize A Transaction
IASB
44. Working totals
Net Income =
Depreciation
Deferral
Footings
45. 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.
Depreciation
Recognizing unrecorded - earned revenues
Valuation
Footings
46. Generally Accepted Accounting Principles - or guidelines for financial accounting.
When expenses exceed revenues..
Closing Entries
SEC Requirements for transactions
GAAP
47. Contains only balance sheet accounts.
Net Income =
Board of Directors
'Big Bath Theory'
Final Trial Balance
48. A temporary account that summarizes all revenues and expenses for the period.
Adjusting entries affect...
Normal Balance
Income Summary Account
We Recognize A Transaction
49. 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
Sole proprietorship
Dividends are what to SE
Accumulated Depreciation accounts are deducted from..
50. Cash account
Stockholder's Equity =
Events that are recorded as transactions
Normal Balance
Adjusting entries NEVER affect..