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Test your basic knowledge |
CLEP Financial Accounting
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Subjects
:
clep
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Final Trial Balance
Periodicity
Adjusting entries affect...
2. Lists all accounts and their balances
Permanent Accounts (Real Accounts)
Adjusted Trial Balance
Final Trial Balance
FASB
3. Postponement of recognition of an expense already paid.
Allocating recorded costs between 2 or more accounting periods (ARC)
Corporations
Deferral
Actuaries
4. It's usual balance and is the side (debit or credit) that increases the amount.
Periodicity
Normal Balance
'Big Bath Theory'
Recognition Point
5. If you're having a bad year - to dump everything into something else like pensions
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6. Shows the changes in RE over an accounting period.
Recognizing unrecorded - earned revenues
Statement of Retained Earnings:
Liquidity
Cost Principle
7. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Net Income =
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Continuity Assumption
Liquidity
8. Accounting periods of less than a year.
Steps for Income Summary Account
Deferral
Interim Periods
Continuity
9. Accounting Equation
Normal Balance
Adjusted Trial Balance
Stockholder's Equity =
Accounting Equation
10. Match expenses with the revenues that they help generate - & vice versa.
Operating Activities
Revenues are what to SE..
Matching Rule
Accumulated Depreciation Accounts
11. Decreases
Depreciation
Dividends are what to SE
Long term assets are..
Balance Sheet
12. Payments received in advance - and deposits made on goods and services
Cost Principle
Stockholder's Equity =
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognizing Unrecorded Expenses (RUE)
13. The predetermined time at which a transaction should be recorded.
Valuation
Long term assets are..
Accumulated Depreciation accounts are deducted from..
Recognition Point
14. Increases
Statement of Retained Earnings:
Normal Balance
Adjusted Trial Balance
Revenues are what to SE..
15. Contains only balance sheet accounts.
Consignment Sale
Normal Balance
Statement of Retained Earnings:
Final Trial Balance
16. Contributed Capital + Retained Earnings
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17. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Normal Balance
Net Income =
Events that are recorded as transactions
Balance Sheet
18. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Accounting Equation
Steps for Income Summary Account
Interim Periods
Valuation
19. Sole worker of your business
GASB
Expenses are what to SE..
Actuaries
Sole proprietorship
20. As an expense and the corresponding liability accumulate.
Accrued Expenses
Post-closing trial balance
Adjusted Trial Balance
Expenses are what to SE..
21. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Statement of Retained Earnings:
Accounting Equation
Income Statement
Permanent Accounts (Real Accounts)
22. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
GAAP
Continuity Assumption
Steps for Income Summary Account
Matching Rule
23. Decreases
Fiscal Year
Stockholder's Equity =
Statement of Retained Earnings:
Expenses are what to SE..
24. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Continuity
Post-closing trial balance
Valuation
25. 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.
'Big Bath Theory'
Events that are recorded as transactions
Valuation
Cash Basis of Accounting
26. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Allocating recorded costs between 2 or more accounting periods (ARC)
Recognizing Unrecorded Expenses (RUE)
Liquidity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
27. 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.
Footings
Recognizing unrecorded - earned revenues
Cost Principle
When expenses exceed revenues..
28. 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)
Normal Balance
'Big Bath Theory'
Fiscal Year
Consignment Sale
29. 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
'Big Bath Theory'
Accrual Accounting
Post-closing trial balance
Liquidity
30. A 12 month accounting period (Vary depending on slack seasons)
Long term assets are..
Fiscal Year
Depreciation
Contra Account
31. Revenues - Expenses
Allocating recorded costs between 2 or more accounting periods (ARC)
Cash Basis of Accounting
Post-closing trial balance
Net Income =
32. Their related asset accounts on the balance sheet
Accrual Accounting
Accumulated Depreciation accounts are deducted from..
Securities Exchange Commission (SEC)
Board of Directors
33. The manipulation of revenues and expenses to achieve a specific outcome.
Carrying Value
Earnings Management
Stockholder's Equity
Final Trial Balance
34. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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35. Deferral of an expense! (Except land)
Accrued Expenses
Going Concern
Adjusted Trial Balance
Long term assets are..
36. International Accounting Standards Board.
Mutual Agency
Revenues are what to SE..
IASB
Going Concern
37. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Liquidity
Going Concern
Cost Principle
Revenues are what to SE..
38. Determines corporate policy - declares dividends and appoints management.
Normal Balance
Board of Directors
Corporations
Continuity
39. Choosing the number of accounting periods
Continuity
Contra Account
Not recorded as transactions
Interim Periods
40. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Recognition
Periodicity
Closing Entries
Corporations
41. Working totals
Final Trial Balance
Footings
GAAP
Sole proprietorship
42. Selling goods and services to customers - employing managers and workers.
Balance Sheet
Operating Activities
Contra Account
FASB
43. Used to accumulate the depreciation on each long-term asset
Accumulated Depreciation Accounts
Revenues are what to SE..
Cash Basis of Accounting
Actuaries
44. People that estimate various things
Matching Rule
Income Statement
Actuaries
Deferral
45. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Depreciation
Allocating recorded costs between 2 or more accounting periods (ARC)
Operating Activities
Valuation
46. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Actuaries
Not recorded as transactions
Income Summary Account
Dividends are what to SE
47. 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
Net Income =
Closing Entries
Going Concern
Income Statement
48. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Balance Sheet
Mutual Agency
Consignment Sale
Income Summary Account
49. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Liquidity
Accrual Accounting
Fiscal Year
Post-closing trial balance
50. Revenues that a company has earned but for which no entry has been made in the accounting records
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Fiscal Year
Accrued revenues
Sole proprietorship
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