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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. If you're having a bad year - to dump everything into something else like pensions
2. People that estimate various things
Operating Activities
Securities Exchange Commission (SEC)
Actuaries
Depreciation
3. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
We Recognize A Transaction
Cash Basis of Accounting
Recognizing unrecorded - earned revenues
FASB
4. The practice of recording transactions at exchange price at the point of recognition.
Fiscal Year
Cash Basis of Accounting
Continuity Assumption
Cost Principle
5. Accounting Equation
Accounting Equation
Accumulated Depreciation Accounts
Actuaries
Adjusting entries affect...
6. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Balance Sheet
Valuation Issue
Securities Exchange Commission (SEC)
Footings
7. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Fiscal Year
Recognition Point
Securities Exchange Commission (SEC)
Corporations
8. Lists all accounts and their balances
Expenses are what to SE..
Adjusted Trial Balance
Mutual Agency
Contra Account
9. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Not recorded as transactions
Accumulated Depreciation accounts are deducted from..
Periodicity
Mutual Agency
10. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
FASB
Carrying Value
Periodicity
Mutual Agency
11. Cash account
Liquidity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Balance Sheet
Adjusting entries NEVER affect..
12. Decreases
Going Concern
Dividends are what to SE
Recognition Point
Contra Account
13. Match expenses with the revenues that they help generate - & vice versa.
Corporations
Carrying Value
When expenses exceed revenues..
Matching Rule
14. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Allocating recorded costs between 2 or more accounting periods (ARC)
Adjusting entries NEVER affect..
Cost Principle
Recognizing unrecorded - earned revenues
15. Contributed Capital + Retained Earnings
16. Working totals
'Big Bath Theory'
Footings
Accrued revenues
Stockholder's Equity =
17. A separate account that is paired with a related account
Continuity
Contra Account
Mutual Agency
Recognition
18. The estimation of business's net income in terms of accounting periods.
Income Summary Account
Periodicity
Accrued Expenses
Consignment Sale
19. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Post-closing trial balance
Stockholder's Equity
Matching Rule
Board of Directors
20. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Continuity
Steps for Income Summary Account
Fiscal Year
Accrual Accounting
21. Revenues - Expenses
Continuity Assumption
Allocating recorded costs between 2 or more accounting periods (ARC)
Mutual Agency
Net Income =
22. Customer buys a service - company pays an employee for service - company performs service
Continuity Assumption
We Recognize A Transaction
Events that are recorded as transactions
Accumulated Depreciation Accounts
23. The ability to have enough cash to pay debts when they are due.
Dividends are what to SE
Liquidity
Accrued revenues
FASB
24. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
GASB
FASB
SEC Requirements for transactions
Consignment Sale
25. Payments received in advance - and deposits made on goods and services
Valuation Issue
Liquidity
Normal Balance
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
26. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
Recognizing unrecorded - earned revenues
Events that are recorded as transactions
Adjusted Trial Balance
27. 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
Accumulated Depreciation accounts are deducted from..
Interim Periods
Adjusted Trial Balance
28. 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
Deferral
Normal Balance
Long term assets are..
Accrual Accounting
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.
Adjusting entries affect...
Actuaries
Cash Basis of Accounting
GAAP
30. Net income on the income statement - and profitability comparisons from one accounting period to the next.
SEC Requirements for transactions
Stockholder's Equity =
Adjusting entries affect...
Balance Sheet
31. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Adjusted Trial Balance
Adjusting entries affect...
Periodicity
Securities Exchange Commission (SEC)
32. 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
Deferral
Accrual Accounting
Income Statement
We Recognize A Transaction
33. Accounting periods of less than a year.
Statement of Retained Earnings:
Dividends are what to SE
Corporations
Interim Periods
34. International Accounting Standards Board.
IASB
Accounting Equation
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Stockholder's Equity =
35. Used to accumulate the depreciation on each long-term asset
Securities Exchange Commission (SEC)
Stockholder's Equity
Accumulated Depreciation Accounts
Accrual Accounting
36. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
'Big Bath Theory'
Dividends are what to SE
Balance Sheet
Operating Activities
37. The manipulation of revenues and expenses to achieve a specific outcome.
Accounting Equation
Earnings Management
GASB
Revenues are what to SE..
38. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Stockholder's Equity
Corporations
Going Concern
FASB
39. Sole worker of your business
Post-closing trial balance
Sole proprietorship
Accrued Expenses
Continuity
40. Choosing the number of accounting periods
Footings
Recognition Point
Continuity
Final Trial Balance
41. 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
Adjusting entries NEVER affect..
Post-closing trial balance
Corporations
42. 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
Adjusting entries NEVER affect..
Accumulated Depreciation accounts are deducted from..
Closing Entries
Normal Balance
43. It's usual balance and is the side (debit or credit) that increases the amount.
Stockholder's Equity =
Normal Balance
IASB
'Big Bath Theory'
44. Determines corporate policy - declares dividends and appoints management.
Accumulated Depreciation accounts are deducted from..
Board of Directors
Sole proprietorship
Liquidity
45. Decreases
Expenses are what to SE..
Income Summary Account
Footings
GASB
46. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Adjusted Trial Balance
Adjusting entries affect...
Accounting Equation
Valuation
47. A net loss occurs
Recognition
SEC Requirements for transactions
Stockholder's Equity =
When expenses exceed revenues..
48. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Actuaries
Recognition
GAAP
Recognizing Unrecorded Expenses (RUE)
49. The predetermined time at which a transaction should be recorded.
Recognition Point
Revenues are what to SE..
Continuity Assumption
Accrued revenues
50. Contains only balance sheet accounts.
Steps for Income Summary Account
Accrued Expenses
Final Trial Balance
Continuity Assumption