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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. 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
Final Trial Balance
SEC Requirements for transactions
Post-closing trial balance
2. The difficulty of deciding when a business transaction should be recorded
Income Summary Account
Adjusting entries affect...
Recognition
Contra Account
3. Match expenses with the revenues that they help generate - & vice versa.
Actuaries
GASB
Operating Activities
Matching Rule
4. It's usual balance and is the side (debit or credit) that increases the amount.
Adjusting entries NEVER affect..
Valuation
Accumulated Depreciation Accounts
Normal Balance
5. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Final Trial Balance
Corporations
GAAP
Liquidity
6. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
When expenses exceed revenues..
Securities Exchange Commission (SEC)
Post-closing trial balance
Adjusting entries affect...
7. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Net Income =
'Big Bath Theory'
Board of Directors
8. Revenues - Expenses
Revenues are what to SE..
Net Income =
Fiscal Year
Securities Exchange Commission (SEC)
9. International Accounting Standards Board.
Accumulated Depreciation Accounts
Accrual Accounting
Liquidity
IASB
10. As an expense and the corresponding liability accumulate.
Stockholder's Equity =
Cash Basis of Accounting
Accounting Equation
Accrued Expenses
11. The estimation of business's net income in terms of accounting periods.
Periodicity
Accumulated Depreciation Accounts
Securities Exchange Commission (SEC)
Stockholder's Equity
12. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Cash Basis of Accounting
Going Concern
Fiscal Year
Recognizing Unrecorded Expenses (RUE)
13. Used to accumulate the depreciation on each long-term asset
Liquidity
Accumulated Depreciation Accounts
Accounting Equation
GASB
14. Sole worker of your business
Sole proprietorship
Adjusted Trial Balance
Accrual Accounting
IASB
15. A net loss occurs
When expenses exceed revenues..
IASB
Net Income =
Consignment Sale
16. Determines corporate policy - declares dividends and appoints management.
Fiscal Year
Board of Directors
Stockholder's Equity =
Dividends are what to SE
17. Their related asset accounts on the balance sheet
Securities Exchange Commission (SEC)
Accumulated Depreciation accounts are deducted from..
When expenses exceed revenues..
Closing Entries
18. 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
Income Statement
Consignment Sale
Balance Sheet
Recognition Point
19. A separate account that is paired with a related account
Sole proprietorship
Adjusted Trial Balance
Interim Periods
Contra Account
20. 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.
When expenses exceed revenues..
Valuation Issue
Accounting Equation
Recognizing unrecorded - earned revenues
21. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Accounting Equation
Valuation
Accumulated Depreciation Accounts
Continuity
22. Decreases
Dividends are what to SE
Events that are recorded as transactions
Deferral
Corporations
23. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Stockholder's Equity =
Corporations
Permanent Accounts (Real Accounts)
Going Concern
24. Accounting periods of less than a year.
Matching Rule
Expenses are what to SE..
Corporations
Interim Periods
25. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Mutual Agency
Expenses are what to SE..
Post-closing trial balance
When expenses exceed revenues..
26. Contains only balance sheet accounts.
Cash Basis of Accounting
Final Trial Balance
Recognition Point
Stockholder's Equity =
27. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
'Big Bath Theory'
Valuation Issue
Dividends are what to SE
Accrual Accounting
28. Selling goods and services to customers - employing managers and workers.
Operating Activities
Expenses are what to SE..
Accounting Equation
FASB
29. The ability to have enough cash to pay debts when they are due.
Normal Balance
When expenses exceed revenues..
Allocating recorded costs between 2 or more accounting periods (ARC)
Liquidity
30. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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31. Cash account
Adjusting entries NEVER affect..
'Big Bath Theory'
Securities Exchange Commission (SEC)
Cash Basis of Accounting
32. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
We Recognize A Transaction
Valuation
Continuity
Closing Entries
33. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Long term assets are..
Cost Principle
Valuation
GAAP
34. Postponement of recognition of an expense already paid.
Deferral
Periodicity
Interim Periods
We Recognize A Transaction
35. Shows the changes in RE over an accounting period.
Board of Directors
Statement of Retained Earnings:
Going Concern
Actuaries
36. A temporary account that summarizes all revenues and expenses for the period.
FASB
Continuity
Income Statement
Income Summary Account
37. The predetermined time at which a transaction should be recorded.
GAAP
Cost Principle
Revenues are what to SE..
Recognition Point
38. 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
Continuity Assumption
Recognition Point
Closing Entries
39. Payments received in advance - and deposits made on goods and services
Recognizing Unrecorded Expenses (RUE)
Adjusting entries affect...
FASB
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
40. Lists all accounts and their balances
Adjusted Trial Balance
Fiscal Year
Accounting Equation
Statement of Retained Earnings:
41. Working totals
Actuaries
Not recorded as transactions
Footings
SEC Requirements for transactions
42. Choosing the number of accounting periods
Footings
Continuity
Events that are recorded as transactions
Revenues are what to SE..
43. People that estimate various things
Actuaries
Adjusted Trial Balance
Cost Principle
FASB
44. 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)
Cost Principle
Consignment Sale
Footings
Normal Balance
45. Increases
Accumulated Depreciation accounts are deducted from..
Revenues are what to SE..
Actuaries
Closing Entries
46. Revenues that a company has earned but for which no entry has been made in the accounting records
Accumulated Depreciation accounts are deducted from..
Accrued revenues
Consignment Sale
Fiscal Year
47. Decreases
Accrual Accounting
Expenses are what to SE..
SEC Requirements for transactions
Normal Balance
48. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Statement of Retained Earnings:
Continuity
Mutual Agency
Accrued revenues
49. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
Statement of Retained Earnings:
Accounting Equation
Continuity Assumption
50. The practice of recording transactions at exchange price at the point of recognition.
Stockholder's Equity =
Footings
Periodicity
Cost Principle