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