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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. A temporary account that summarizes all revenues and expenses for the period.
Income Summary Account
Board of Directors
Balance Sheet
'Big Bath Theory'
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)
Operating Activities
Recognition
Continuity
3. The difficulty of deciding when a business transaction should be recorded
SEC Requirements for transactions
Adjusted Trial Balance
Recognition
Matching Rule
4. If you're having a bad year - to dump everything into something else like pensions
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5. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Valuation Issue
Footings
Statement of Retained Earnings:
Adjusting entries NEVER affect..
6. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Sole proprietorship
Going Concern
Fiscal Year
Final Trial Balance
7. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Adjusting entries affect...
Sole proprietorship
Income Statement
8. Decreases
Continuity
Going Concern
Dividends are what to SE
Expenses are what to SE..
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)
SEC Requirements for transactions
Earnings Management
'Big Bath Theory'
Consignment Sale
10. Determines corporate policy - declares dividends and appoints management.
Deferral
Board of Directors
Recognition Point
Not recorded as transactions
11. Revenues - Expenses
SEC Requirements for transactions
Operating Activities
Net Income =
Consignment Sale
12. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Sole proprietorship
Carrying Value
FASB
Recognizing Unrecorded Expenses (RUE)
13. As an expense and the corresponding liability accumulate.
Accrued Expenses
Final Trial Balance
Accumulated Depreciation Accounts
Stockholder's Equity
14. Cash account
Adjusting entries NEVER affect..
GASB
Accumulated Depreciation Accounts
Recognizing unrecorded - earned revenues
15. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Securities Exchange Commission (SEC)
Continuity
'Big Bath Theory'
Adjusting entries affect...
16. Choosing the number of accounting periods
Carrying Value
Cost Principle
Dividends are what to SE
Continuity
17. Increases
We Recognize A Transaction
Revenues are what to SE..
Net Income =
When expenses exceed revenues..
18. People that estimate various things
'Big Bath Theory'
Recognizing Unrecorded Expenses (RUE)
Contra Account
Actuaries
19. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Valuation Issue
Expenses are what to SE..
Actuaries
Not recorded as transactions
20. 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
We Recognize A Transaction
Dividends are what to SE
Accrual Accounting
Cash Basis of Accounting
21. Their related asset accounts on the balance sheet
Events that are recorded as transactions
Accumulated Depreciation accounts are deducted from..
We Recognize A Transaction
Revenues are what to SE..
22. The estimation of business's net income in terms of accounting periods.
Final Trial Balance
Valuation Issue
Interim Periods
Periodicity
23. The manipulation of revenues and expenses to achieve a specific outcome.
Deferral
Earnings Management
Actuaries
Continuity Assumption
24. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Post-closing trial balance
Operating Activities
Liquidity
Events that are recorded as transactions
25. A 12 month accounting period (Vary depending on slack seasons)
Periodicity
Fiscal Year
Revenues are what to SE..
Allocating recorded costs between 2 or more accounting periods (ARC)
26. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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27. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Recognition
Adjusted Trial Balance
Depreciation
Permanent Accounts (Real Accounts)
28. The ability to have enough cash to pay debts when they are due.
IASB
Normal Balance
Liquidity
SEC Requirements for transactions
29. Match expenses with the revenues that they help generate - & vice versa.
Accumulated Depreciation Accounts
Mutual Agency
Consignment Sale
Matching Rule
30. Postponement of recognition of an expense already paid.
Deferral
Liquidity
IASB
Permanent Accounts (Real Accounts)
31. Decreases
Dividends are what to SE
Net Income =
Accrued Expenses
Footings
32. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Going Concern
Recognition
Contra Account
33. Sole worker of your business
Contra Account
Sole proprietorship
Long term assets are..
Adjusting entries affect...
34. The amount allocated to any one accounting period.
Income Statement
Recognizing unrecorded - earned revenues
Cost Principle
Depreciation
35. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Consignment Sale
Events that are recorded as transactions
Valuation
Adjusting entries affect...
36. 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
Allocating recorded costs between 2 or more accounting periods (ARC)
Sole proprietorship
Accrued Expenses
37. A net loss occurs
When expenses exceed revenues..
Mutual Agency
Steps for Income Summary Account
Adjusted Trial Balance
38. The predetermined time at which a transaction should be recorded.
Footings
Accumulated Depreciation Accounts
Recognition Point
Not recorded as transactions
39. Lists all accounts and their balances
Adjusted Trial Balance
Mutual Agency
Income Summary Account
Recognition Point
40. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Adjusted Trial Balance
Revenues are what to SE..
Going Concern
Balance Sheet
41. Contains only balance sheet accounts.
Recognizing Unrecorded Expenses (RUE)
IASB
Final Trial Balance
FASB
42. The net amount - or 'Book Value' of an asset
Closing Entries
GASB
Allocating recorded costs between 2 or more accounting periods (ARC)
Carrying Value
43. A separate account that is paired with a related account
Contra Account
Dividends are what to SE
Long term assets are..
Normal Balance
44. Payments received in advance - and deposits made on goods and services
Earnings Management
Stockholder's Equity =
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Going Concern
45. Working totals
Continuity
Footings
Interim Periods
SEC Requirements for transactions
46. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Consignment Sale
SEC Requirements for transactions
We Recognize A Transaction
GAAP
47. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Valuation
Going Concern
'Big Bath Theory'
GAAP
48. It's usual balance and is the side (debit or credit) that increases the amount.
Allocating recorded costs between 2 or more accounting periods (ARC)
Revenues are what to SE..
Normal Balance
GAAP
49. 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
Adjusting entries NEVER affect..
Earnings Management
Accumulated Depreciation Accounts
50. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Steps for Income Summary Account
Stockholder's Equity =
Liquidity
Securities Exchange Commission (SEC)
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