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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 separate account that is paired with a related account
Cash Basis of Accounting
Not recorded as transactions
Contra Account
Adjusted Trial Balance
2. The difficulty of deciding when a business transaction should be recorded
Balance Sheet
SEC Requirements for transactions
Recognition
Adjusted Trial Balance
3. The manipulation of revenues and expenses to achieve a specific outcome.
Earnings Management
Long term assets are..
Interim Periods
We Recognize A Transaction
4. People that estimate various things
Securities Exchange Commission (SEC)
Cost Principle
Income Statement
Actuaries
5. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Going Concern
Post-closing trial balance
Valuation
GASB
6. The estimation of business's net income in terms of accounting periods.
Mutual Agency
Periodicity
Going Concern
Accounting Equation
7. Their related asset accounts on the balance sheet
When expenses exceed revenues..
Continuity
Accumulated Depreciation accounts are deducted from..
SEC Requirements for transactions
8. Choosing the number of accounting periods
Balance Sheet
Continuity
Permanent Accounts (Real Accounts)
FASB
9. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Permanent Accounts (Real Accounts)
Final Trial Balance
Valuation
We Recognize A Transaction
10. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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11. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Footings
Income Statement
Post-closing trial balance
12. A net loss occurs
Recognizing Unrecorded Expenses (RUE)
When expenses exceed revenues..
Recognizing unrecorded - earned revenues
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
13. The practice of recording transactions at exchange price at the point of recognition.
Earnings Management
Mutual Agency
Post-closing trial balance
Cost Principle
14. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Cost Principle
GAAP
Cash Basis of Accounting
Actuaries
15. Increases
Final Trial Balance
Adjusting entries NEVER affect..
Revenues are what to SE..
Closing Entries
16. Contributed Capital + Retained Earnings
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17. As an expense and the corresponding liability accumulate.
Accrued Expenses
Periodicity
Liquidity
Revenues are what to SE..
18. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
IASB
Periodicity
Net Income =
19. Payments received in advance - and deposits made on goods and services
Steps for Income Summary Account
Carrying Value
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Permanent Accounts (Real Accounts)
20. Determines corporate policy - declares dividends and appoints management.
Adjusted Trial Balance
Accounting Equation
Board of Directors
Earnings Management
21. If you're having a bad year - to dump everything into something else like pensions
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22. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Earnings Management
Recognizing Unrecorded Expenses (RUE)
Corporations
Accumulated Depreciation accounts are deducted from..
23. Used to accumulate the depreciation on each long-term asset
Adjusting entries NEVER affect..
Accumulated Depreciation Accounts
When expenses exceed revenues..
Accrued revenues
24. The amount allocated to any one accounting period.
Cash Basis of Accounting
Interim Periods
Stockholder's Equity =
Depreciation
25. Decreases
Board of Directors
Dividends are what to SE
Mutual Agency
Income Summary Account
26. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Expenses are what to SE..
Matching Rule
Earnings Management
Going Concern
27. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrued revenues
Fiscal Year
Final Trial Balance
'Big Bath Theory'
28. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Accrued revenues
FASB
Board of Directors
Events that are recorded as transactions
29. Cash account
Steps for Income Summary Account
IASB
Long term assets are..
Adjusting entries NEVER affect..
30. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
SEC Requirements for transactions
Balance Sheet
Accounting Equation
Operating Activities
31. International Accounting Standards Board.
Accumulated Depreciation accounts are deducted from..
Steps for Income Summary Account
IASB
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
32. 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)
Recognizing Unrecorded Expenses (RUE)
Board of Directors
Final Trial Balance
33. Customer buys a service - company pays an employee for service - company performs service
Fiscal Year
Dividends are what to SE
Events that are recorded as transactions
Stockholder's Equity
34. Accounting periods of less than a year.
Matching Rule
Board of Directors
FASB
Interim Periods
35. Sole worker of your business
Balance Sheet
GAAP
Sole proprietorship
Not recorded as transactions
36. 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
Net Income =
Valuation
Corporations
37. Working totals
Footings
Events that are recorded as transactions
Accumulated Depreciation accounts are deducted from..
Interim Periods
38. 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
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Income Statement
Dividends are what to SE
Stockholder's Equity =
39. A 12 month accounting period (Vary depending on slack seasons)
Fiscal Year
Actuaries
FASB
Cash Basis of Accounting
40. 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)
Cash Basis of Accounting
We Recognize A Transaction
Accrual Accounting
Consignment Sale
41. Deferral of an expense! (Except land)
Accrued revenues
Final Trial Balance
'Big Bath Theory'
Long term assets are..
42. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Allocating recorded costs between 2 or more accounting periods (ARC)
Accrual Accounting
Consignment Sale
Balance Sheet
43. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Continuity Assumption
Balance Sheet
Valuation Issue
Income Summary Account
44. Decreases
Recognizing Unrecorded Expenses (RUE)
Closing Entries
Expenses are what to SE..
Earnings Management
45. Accounting Equation
Balance Sheet
Recognition Point
Cash Basis of Accounting
Accounting Equation
46. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Footings
Continuity Assumption
GAAP
Long term assets are..
47. 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
Normal Balance
Income Summary Account
Accumulated Depreciation Accounts
48. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Not recorded as transactions
Allocating recorded costs between 2 or more accounting periods (ARC)
Balance Sheet
Valuation
49. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Going Concern
Accumulated Depreciation Accounts
Adjusting entries affect...
Depreciation
50. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Steps for Income Summary Account
Valuation Issue
Consignment Sale
Recognition Point
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