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