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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. Contributed Capital + Retained Earnings
2. Contains only balance sheet accounts.
Adjusted Trial Balance
Allocating recorded costs between 2 or more accounting periods (ARC)
Final Trial Balance
Accrued revenues
3. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Adjusted Trial Balance
Not recorded as transactions
Liquidity
Post-closing trial balance
4. 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
Securities Exchange Commission (SEC)
Deferral
Closing Entries
Sole proprietorship
5. The estimation of business's net income in terms of accounting periods.
Stockholder's Equity
Operating Activities
Dividends are what to SE
Periodicity
6. 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
Interim Periods
When expenses exceed revenues..
Income Statement
Liquidity
7. Decreases
Events that are recorded as transactions
Normal Balance
Accumulated Depreciation Accounts
Expenses are what to SE..
8. Payments received in advance - and deposits made on goods and services
Continuity Assumption
Corporations
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognition
9. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Permanent Accounts (Real Accounts)
GASB
Statement of Retained Earnings:
Expenses are what to SE..
10. The ability to have enough cash to pay debts when they are due.
Fiscal Year
Matching Rule
Liquidity
Long term assets are..
11. Choosing the number of accounting periods
Accrued revenues
Dividends are what to SE
IASB
Continuity
12. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Cash Basis of Accounting
Dividends are what to SE
Accounting Equation
13. A 12 month accounting period (Vary depending on slack seasons)
Fiscal Year
Accrual Accounting
Interim Periods
Not recorded as transactions
14. The manipulation of revenues and expenses to achieve a specific outcome.
Fiscal Year
Earnings Management
Adjusting entries NEVER affect..
Securities Exchange Commission (SEC)
15. Revenues - Expenses
Deferral
Recognizing unrecorded - earned revenues
Net Income =
Stockholder's Equity
16. Increases
Sole proprietorship
Revenues are what to SE..
Actuaries
Operating Activities
17. A separate account that is paired with a related account
Adjusting entries affect...
Revenues are what to SE..
Fiscal Year
Contra Account
18. Customer buys a service - company pays an employee for service - company performs service
Steps for Income Summary Account
Expenses are what to SE..
Normal Balance
Events that are recorded as transactions
19. If you're having a bad year - to dump everything into something else like pensions
20. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognition Point
Sole proprietorship
Footings
Recognizing Unrecorded Expenses (RUE)
21. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Contra Account
Net Income =
Permanent Accounts (Real Accounts)
Income Summary Account
22. 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)
Accrued revenues
Adjusting entries NEVER affect..
Footings
23. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Fiscal Year
Valuation Issue
Stockholder's Equity
Footings
24. Shows the changes in RE over an accounting period.
GASB
Recognizing Unrecorded Expenses (RUE)
Income Statement
Statement of Retained Earnings:
25. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Securities Exchange Commission (SEC)
Valuation Issue
Not recorded as transactions
Corporations
26. 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
SEC Requirements for transactions
Permanent Accounts (Real Accounts)
Accumulated Depreciation accounts are deducted from..
27. Deferral of an expense! (Except land)
Not recorded as transactions
Long term assets are..
Adjusting entries affect...
Periodicity
28. Determines corporate policy - declares dividends and appoints management.
Board of Directors
Contra Account
Recognition Point
Recognizing unrecorded - earned revenues
29. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Corporations
Earnings Management
Statement of Retained Earnings:
30. Sole worker of your business
Recognizing Unrecorded Expenses (RUE)
Footings
FASB
Sole proprietorship
31. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Sole proprietorship
Permanent Accounts (Real Accounts)
Recognizing Unrecorded Expenses (RUE)
Post-closing trial balance
32. 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
Events that are recorded as transactions
Continuity Assumption
Long term assets are..
33. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Board of Directors
Footings
Income Summary Account
Balance Sheet
34. The amount allocated to any one accounting period.
Sole proprietorship
Income Statement
Recognition Point
Depreciation
35. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
When expenses exceed revenues..
Mutual Agency
We Recognize A Transaction
Earnings Management
36. The net amount - or 'Book Value' of an asset
Cost Principle
Carrying Value
Depreciation
FASB
37. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Revenues are what to SE..
'Big Bath Theory'
IASB
FASB
38. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
GASB
SEC Requirements for transactions
Valuation
Expenses are what to SE..
39. Used to accumulate the depreciation on each long-term asset
Stockholder's Equity =
Accumulated Depreciation Accounts
Corporations
When expenses exceed revenues..
40. It's usual balance and is the side (debit or credit) that increases the amount.
Adjusting entries NEVER affect..
Normal Balance
Periodicity
Cost Principle
41. Selling goods and services to customers - employing managers and workers.
Operating Activities
Depreciation
Going Concern
Normal Balance
42. A temporary account that summarizes all revenues and expenses for the period.
GASB
Income Summary Account
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Income Statement
43. The difficulty of deciding when a business transaction should be recorded
Going Concern
Continuity Assumption
Statement of Retained Earnings:
Recognition
44. Working totals
Cost Principle
Footings
Adjusted Trial Balance
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
45. Postponement of recognition of an expense already paid.
Valuation
Deferral
Normal Balance
Adjusting entries affect...
46. Accounting Equation
Interim Periods
Accounting Equation
Fiscal Year
Recognizing unrecorded - earned revenues
47. Accounting periods of less than a year.
Interim Periods
Cash Basis of Accounting
Accrued Expenses
Recognizing Unrecorded Expenses (RUE)
48. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
IASB
Expenses are what to SE..
GAAP
Allocating recorded costs between 2 or more accounting periods (ARC)
49. Their related asset accounts on the balance sheet
IASB
Footings
Accumulated Depreciation accounts are deducted from..
Steps for Income Summary Account
50. People that estimate various things
Footings
Dividends are what to SE
Actuaries
GAAP