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