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