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