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