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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. Match expenses with the revenues that they help generate - & vice versa.
Revenues are what to SE..
Recognizing unrecorded - earned revenues
Matching Rule
Liquidity
2. 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
Operating Activities
Recognizing unrecorded - earned revenues
Closing Entries
Expenses are what to SE..
3. 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.
Accounting Equation
Recognizing unrecorded - earned revenues
Corporations
SEC Requirements for transactions
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
Closing Entries
Income Summary Account
Income Statement
Adjusted Trial Balance
5. The predetermined time at which a transaction should be recorded.
Operating Activities
Recognition Point
Stockholder's Equity =
Footings
6. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Mutual Agency
Revenues are what to SE..
GASB
Matching Rule
7. Cash account
Events that are recorded as transactions
'Big Bath Theory'
Adjusting entries NEVER affect..
We Recognize A Transaction
8. Shows the changes in RE over an accounting period.
Recognition Point
Closing Entries
Cost Principle
Statement of Retained Earnings:
9. Payments received in advance - and deposits made on goods and services
FASB
Periodicity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Securities Exchange Commission (SEC)
10. Selling goods and services to customers - employing managers and workers.
Mutual Agency
Operating Activities
Long term assets are..
Valuation Issue
11. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Recognition
Allocating recorded costs between 2 or more accounting periods (ARC)
Not recorded as transactions
Normal Balance
12. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Allocating recorded costs between 2 or more accounting periods (ARC)
Adjusting entries NEVER affect..
GASB
Not recorded as transactions
13. As an expense and the corresponding liability accumulate.
Statement of Retained Earnings:
Matching Rule
Depreciation
Accrued Expenses
14. Contributed Capital + Retained Earnings
15. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
FASB
Adjusting entries NEVER affect..
GAAP
Cash Basis of Accounting
16. Contains only balance sheet accounts.
Valuation
Final Trial Balance
Cost Principle
Continuity
17. A net loss occurs
When expenses exceed revenues..
Cash Basis of Accounting
Normal Balance
'Big Bath Theory'
18. Decreases
Footings
'Big Bath Theory'
Final Trial Balance
Dividends are what to SE
19. The difficulty of deciding when a business transaction should be recorded
Interim Periods
Recognition
Final Trial Balance
Accumulated Depreciation Accounts
20. People that estimate various things
Continuity
Statement of Retained Earnings:
Periodicity
Actuaries
21. 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
Matching Rule
Recognition
Expenses are what to SE..
22. Choosing the number of accounting periods
Fiscal Year
SEC Requirements for transactions
Statement of Retained Earnings:
Continuity
23. The estimation of business's net income in terms of accounting periods.
Cost Principle
Expenses are what to SE..
Periodicity
'Big Bath Theory'
24. 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.
Closing Entries
Permanent Accounts (Real Accounts)
Cash Basis of Accounting
Adjusting entries affect...
25. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrual Accounting
Accrued revenues
Post-closing trial balance
Allocating recorded costs between 2 or more accounting periods (ARC)
26. Used to accumulate the depreciation on each long-term asset
Adjusting entries affect...
Accumulated Depreciation Accounts
Continuity Assumption
IASB
27. 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)
Closing Entries
Actuaries
Steps for Income Summary Account
28. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Liquidity
Going Concern
Balance Sheet
Long term assets are..
29. Lists all accounts and their balances
Post-closing trial balance
Accumulated Depreciation accounts are deducted from..
Adjusted Trial Balance
Mutual Agency
30. The net amount - or 'Book Value' of an asset
Balance Sheet
SEC Requirements for transactions
Carrying Value
Final Trial Balance
31. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
32. The practice of recording transactions at exchange price at the point of recognition.
Fiscal Year
Valuation
Statement of Retained Earnings:
Cost Principle
33. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Continuity
Recognizing Unrecorded Expenses (RUE)
Not recorded as transactions
Going Concern
34. Their related asset accounts on the balance sheet
Stockholder's Equity =
Permanent Accounts (Real Accounts)
Accumulated Depreciation accounts are deducted from..
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
35. Revenues - Expenses
Valuation Issue
Recognition
Fiscal Year
Net Income =
36. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
FASB
We Recognize A Transaction
Accrued revenues
Periodicity
37. Accounting periods of less than a year.
Interim Periods
Long term assets are..
Not recorded as transactions
GASB
38. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Contra Account
Post-closing trial balance
Net Income =
Mutual Agency
39. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Cost Principle
Stockholder's Equity
Steps for Income Summary Account
40. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Board of Directors
Accrued revenues
Valuation
Cash Basis of Accounting
41. Decreases
Expenses are what to SE..
Revenues are what to SE..
Balance Sheet
Operating Activities
42. Increases
Balance Sheet
Revenues are what to SE..
Liquidity
Income Statement
43. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Long term assets are..
Steps for Income Summary Account
Accumulated Depreciation Accounts
Cash Basis of Accounting
44. Accounting Equation
Accumulated Depreciation accounts are deducted from..
Accounting Equation
Cost Principle
Interim Periods
45. Customer buys a service - company pays an employee for service - company performs service
SEC Requirements for transactions
Stockholder's Equity
Post-closing trial balance
Events that are recorded as transactions
46. Determines corporate policy - declares dividends and appoints management.
Cash Basis of Accounting
Board of Directors
Income Statement
Interim Periods
47. A temporary account that summarizes all revenues and expenses for the period.
Cash Basis of Accounting
Income Summary Account
Board of Directors
Recognizing Unrecorded Expenses (RUE)
48. A separate account that is paired with a related account
Contra Account
Revenues are what to SE..
Valuation Issue
Interim Periods
49. The amount allocated to any one accounting period.
Post-closing trial balance
Depreciation
Securities Exchange Commission (SEC)
SEC Requirements for transactions
50. Generally Accepted Accounting Principles - or guidelines for financial accounting.
GAAP
Fiscal Year
Valuation
Expenses are what to SE..