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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. A net loss occurs
Adjusting entries affect...
When expenses exceed revenues..
Allocating recorded costs between 2 or more accounting periods (ARC)
Fiscal Year
2. A separate account that is paired with a related account
Accumulated Depreciation Accounts
Contra Account
Cash Basis of Accounting
Carrying Value
3. People that estimate various things
Actuaries
Closing Entries
Continuity
Recognizing Unrecorded Expenses (RUE)
4. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Interim Periods
Closing Entries
SEC Requirements for transactions
Carrying Value
5. Deferral of an expense! (Except land)
Not recorded as transactions
Net Income =
Long term assets are..
Operating Activities
6. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Valuation
Interim Periods
Continuity
Final Trial Balance
7. Determines corporate policy - declares dividends and appoints management.
Operating Activities
Post-closing trial balance
Board of Directors
Net Income =
8. Postponement of recognition of an expense already paid.
Fiscal Year
Deferral
Income Statement
Liquidity
9. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Matching Rule
We Recognize A Transaction
Allocating recorded costs between 2 or more accounting periods (ARC)
Accrued revenues
10. 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
Going Concern
Deferral
Liquidity
Income Statement
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
Adjusting entries affect...
Accrual Accounting
Net Income =
Closing Entries
12. Working totals
Revenues are what to SE..
'Big Bath Theory'
Footings
Statement of Retained Earnings:
13. The manipulation of revenues and expenses to achieve a specific outcome.
Expenses are what to SE..
Income Statement
Earnings Management
Stockholder's Equity
14. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
'Big Bath Theory'
Liquidity
Going Concern
Final Trial Balance
15. As an expense and the corresponding liability accumulate.
Accrued Expenses
Post-closing trial balance
Steps for Income Summary Account
Carrying Value
16. Payments received in advance - and deposits made on goods and services
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Accrued Expenses
'Big Bath Theory'
GAAP
17. A 12 month accounting period (Vary depending on slack seasons)
Cash Basis of Accounting
Income Summary Account
Fiscal Year
Mutual Agency
18. The estimation of business's net income in terms of accounting periods.
Actuaries
Post-closing trial balance
Not recorded as transactions
Periodicity
19. 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)
Permanent Accounts (Real Accounts)
Consignment Sale
Recognizing unrecorded - earned revenues
Securities Exchange Commission (SEC)
20. Lists all accounts and their balances
Contra Account
Carrying Value
Adjusted Trial Balance
Adjusting entries affect...
21. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Adjusting entries NEVER affect..
Valuation
Post-closing trial balance
Securities Exchange Commission (SEC)
22. 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.
GAAP
Board of Directors
Recognizing unrecorded - earned revenues
When expenses exceed revenues..
23. International Accounting Standards Board.
Matching Rule
IASB
Adjusting entries affect...
Long term assets are..
24. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Earnings Management
GASB
Footings
Income Statement
25. Match expenses with the revenues that they help generate - & vice versa.
Adjusting entries NEVER affect..
Matching Rule
Allocating recorded costs between 2 or more accounting periods (ARC)
Depreciation
26. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Dividends are what to SE
Stockholder's Equity
We Recognize A Transaction
FASB
27. Revenues - Expenses
Net Income =
Cost Principle
FASB
Events that are recorded as transactions
28. Accounting periods of less than a year.
Periodicity
Interim Periods
Securities Exchange Commission (SEC)
IASB
29. Shows the changes in RE over an accounting period.
Liquidity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognizing Unrecorded Expenses (RUE)
Statement of Retained Earnings:
30. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Permanent Accounts (Real Accounts)
Footings
Accrued Expenses
Actuaries
31. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Earnings Management
Stockholder's Equity
Not recorded as transactions
GAAP
32. 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.
Post-closing trial balance
'Big Bath Theory'
Cash Basis of Accounting
Closing Entries
33. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Actuaries
Corporations
FASB
Liquidity
34. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Events that are recorded as transactions
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Depreciation
Post-closing trial balance
35. It's usual balance and is the side (debit or credit) that increases the amount.
SEC Requirements for transactions
Carrying Value
Final Trial Balance
Normal Balance
36. 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
Accounting Equation
Income Summary Account
Consignment Sale
Accrual Accounting
37. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Income Statement
Securities Exchange Commission (SEC)
Steps for Income Summary Account
Allocating recorded costs between 2 or more accounting periods (ARC)
38. Decreases
Income Statement
Fiscal Year
Expenses are what to SE..
GASB
39. The predetermined time at which a transaction should be recorded.
Stockholder's Equity =
Recognition Point
Liquidity
Securities Exchange Commission (SEC)
40. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Fiscal Year
Adjusted Trial Balance
Balance Sheet
Consignment Sale
41. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Cash Basis of Accounting
Income Statement
Mutual Agency
Post-closing trial balance
42. Contributed Capital + Retained Earnings
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43. Contains only balance sheet accounts.
FASB
Final Trial Balance
GAAP
Continuity Assumption
44. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Carrying Value
Long term assets are..
Recognizing Unrecorded Expenses (RUE)
45. If you're having a bad year - to dump everything into something else like pensions
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46. Revenues that a company has earned but for which no entry has been made in the accounting records
Fiscal Year
Adjusting entries NEVER affect..
Actuaries
Accrued revenues
47. The difficulty of deciding when a business transaction should be recorded
Board of Directors
Adjusted Trial Balance
Recognition
Mutual Agency
48. Their related asset accounts on the balance sheet
GAAP
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognition
Accumulated Depreciation accounts are deducted from..
49. Accounting Equation
Accounting Equation
Sole proprietorship
Accumulated Depreciation Accounts
Operating Activities
50. The practice of recording transactions at exchange price at the point of recognition.
Adjusting entries affect...
Accumulated Depreciation Accounts
Cost Principle
Adjusting entries NEVER affect..