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