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