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