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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. 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
Fiscal Year
Net Income =
Stockholder's Equity =
2. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Carrying Value
Accounting Equation
Earnings Management
3. The manipulation of revenues and expenses to achieve a specific outcome.
Long term assets are..
Liquidity
Earnings Management
Depreciation
4. Their related asset accounts on the balance sheet
Accumulated Depreciation accounts are deducted from..
We Recognize A Transaction
Adjusting entries NEVER affect..
Dividends are what to SE
5. Accounting Equation
Accounting Equation
Recognition Point
Fiscal Year
Long term assets are..
6. Postponement of recognition of an expense already paid.
Events that are recorded as transactions
Consignment Sale
Deferral
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
Continuity
Net Income =
Income Statement
8. The amount allocated to any one accounting period.
When expenses exceed revenues..
Accumulated Depreciation Accounts
Consignment Sale
Depreciation
9. Selling goods and services to customers - employing managers and workers.
Accumulated Depreciation Accounts
Board of Directors
Operating Activities
Steps for Income Summary Account
10. Accounting periods of less than a year.
Interim Periods
Expenses are what to SE..
Revenues are what to SE..
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
11. Choosing the number of accounting periods
Fiscal Year
Continuity
Expenses are what to SE..
Normal Balance
12. Contributed Capital + Retained Earnings
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13. A net loss occurs
Fiscal Year
When expenses exceed revenues..
Liquidity
We Recognize A Transaction
14. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Fiscal Year
Corporations
Net Income =
IASB
15. Payments received in advance - and deposits made on goods and services
GASB
Not recorded as transactions
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Normal Balance
16. A separate account that is paired with a related account
Recognition Point
Valuation
Deferral
Contra Account
17. Decreases
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Accrued Expenses
Cost Principle
Expenses are what to SE..
18. The predetermined time at which a transaction should be recorded.
Adjusting entries affect...
Recognition Point
Cash Basis of Accounting
Periodicity
19. The ability to have enough cash to pay debts when they are due.
Recognition Point
Liquidity
Actuaries
Adjusting entries NEVER affect..
20. A 12 month accounting period (Vary depending on slack seasons)
Depreciation
Operating Activities
Stockholder's Equity =
Fiscal Year
21. Contains only balance sheet accounts.
Final Trial Balance
Steps for Income Summary Account
Stockholder's Equity
Income Summary Account
22. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Cash Basis of Accounting
When expenses exceed revenues..
Post-closing trial balance
23. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Accumulated Depreciation accounts are deducted from..
Statement of Retained Earnings:
SEC Requirements for transactions
'Big Bath Theory'
24. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Contra Account
Mutual Agency
IASB
GASB
25. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
FASB
Net Income =
Statement of Retained Earnings:
Actuaries
26. If you're having a bad year - to dump everything into something else like pensions
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27. It's usual balance and is the side (debit or credit) that increases the amount.
Income Summary Account
Securities Exchange Commission (SEC)
Earnings Management
Normal Balance
28. The estimation of business's net income in terms of accounting periods.
'Big Bath Theory'
GAAP
Periodicity
Recognition Point
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.
Securities Exchange Commission (SEC)
Not recorded as transactions
Steps for Income Summary Account
Carrying Value
30. Customer buys a service - company pays an employee for service - company performs service
Permanent Accounts (Real Accounts)
Cash Basis of Accounting
Events that are recorded as transactions
Recognition Point
31. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
GASB
FASB
Accrued revenues
32. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Expenses are what to SE..
Net Income =
Actuaries
Mutual Agency
33. 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
Depreciation
Earnings Management
Accounting Equation
Income Statement
34. A temporary account that summarizes all revenues and expenses for the period.
Cash Basis of Accounting
Actuaries
Revenues are what to SE..
Income Summary Account
35. Increases
Revenues are what to SE..
Statement of Retained Earnings:
Mutual Agency
Not recorded as transactions
36. Decreases
Continuity
Recognition Point
Dividends are what to SE
Recognizing unrecorded - earned revenues
37. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Consignment Sale
Steps for Income Summary Account
Statement of Retained Earnings:
Expenses are what to SE..
38. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
'Big Bath Theory'
Interim Periods
Footings
Allocating recorded costs between 2 or more accounting periods (ARC)
39. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Final Trial Balance
Revenues are what to SE..
We Recognize A Transaction
'Big Bath Theory'
40. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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41. Match expenses with the revenues that they help generate - & vice versa.
Depreciation
Matching Rule
Adjusted Trial Balance
Long term assets are..
42. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Adjusting entries NEVER affect..
Accrual Accounting
Consignment Sale
Not recorded as transactions
43. Determines corporate policy - declares dividends and appoints management.
Carrying Value
Board of Directors
Footings
Depreciation
44. Lists all accounts and their balances
Adjusted Trial Balance
Recognition
Statement of Retained Earnings:
Cash Basis of Accounting
45. International Accounting Standards Board.
IASB
SEC Requirements for transactions
Permanent Accounts (Real Accounts)
Recognizing unrecorded - earned revenues
46. 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
Valuation Issue
Allocating recorded costs between 2 or more accounting periods (ARC)
Securities Exchange Commission (SEC)
Closing Entries
47. People that estimate various things
Actuaries
Accrued revenues
Periodicity
Stockholder's Equity =
48. Used to accumulate the depreciation on each long-term asset
Deferral
GAAP
Accumulated Depreciation Accounts
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
49. 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.
Income Summary Account
Board of Directors
Recognizing unrecorded - earned revenues
Mutual Agency
50. Cash account
Income Statement
Accrued revenues
Adjusting entries NEVER affect..
GASB