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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. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Recognition Point
Final Trial Balance
Operating Activities
Steps for Income Summary Account
2. Deferral of an expense! (Except land)
Steps for Income Summary Account
Long term assets are..
Liquidity
Income Statement
3. Accounting periods of less than a year.
Matching Rule
Cost Principle
Interim Periods
Adjusting entries NEVER affect..
4. The predetermined time at which a transaction should be recorded.
Carrying Value
Normal Balance
Recognition Point
Contra Account
5. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Expenses are what to SE..
Post-closing trial balance
Closing Entries
Sole proprietorship
6. Determines corporate policy - declares dividends and appoints management.
IASB
Expenses are what to SE..
Board of Directors
SEC Requirements for transactions
7. 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
Accrued revenues
Steps for Income Summary Account
Contra Account
Closing Entries
8. Match expenses with the revenues that they help generate - & vice versa.
Balance Sheet
Contra Account
Steps for Income Summary Account
Matching Rule
9. 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)
Going Concern
Not recorded as transactions
Consignment Sale
Events that are recorded as transactions
10. The manipulation of revenues and expenses to achieve a specific outcome.
Earnings Management
Events that are recorded as transactions
Continuity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
11. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Contra Account
We Recognize A Transaction
Stockholder's Equity
IASB
12. If you're having a bad year - to dump everything into something else like pensions
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13. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Earnings Management
GAAP
Mutual Agency
Balance Sheet
14. Revenues - Expenses
Dividends are what to SE
GAAP
Cost Principle
Net Income =
15. Customer buys a service - company pays an employee for service - company performs service
Recognition
Contra Account
Footings
Events that are recorded as transactions
16. People that estimate various things
Not recorded as transactions
Actuaries
Consignment Sale
Recognizing Unrecorded Expenses (RUE)
17. Sole worker of your business
Accrual Accounting
Accumulated Depreciation Accounts
Accrued Expenses
Sole proprietorship
18. Postponement of recognition of an expense already paid.
Earnings Management
Deferral
Final Trial Balance
Matching Rule
19. 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
Footings
Continuity Assumption
Valuation
Accrual Accounting
20. Contains only balance sheet accounts.
Continuity Assumption
Final Trial Balance
Valuation
Deferral
21. A net loss occurs
Adjusting entries NEVER affect..
Footings
Accrued revenues
When expenses exceed revenues..
22. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Adjusting entries affect...
Mutual Agency
Accumulated Depreciation Accounts
23. A temporary account that summarizes all revenues and expenses for the period.
Continuity Assumption
Recognition
'Big Bath Theory'
Income Summary Account
24. Selling goods and services to customers - employing managers and workers.
'Big Bath Theory'
Footings
Operating Activities
Steps for Income Summary Account
25. Decreases
Events that are recorded as transactions
Expenses are what to SE..
FASB
SEC Requirements for transactions
26. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Going Concern
GASB
Not recorded as transactions
Income Statement
27. 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
Income Summary Account
Normal Balance
Income Statement
28. A 12 month accounting period (Vary depending on slack seasons)
FASB
Fiscal Year
Deferral
IASB
29. International Accounting Standards Board.
Expenses are what to SE..
IASB
Long term assets are..
Recognition Point
30. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Income Statement
Valuation Issue
Recognition
Expenses are what to SE..
31. The difficulty of deciding when a business transaction should be recorded
Earnings Management
Recognition
Depreciation
Mutual Agency
32. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Mutual Agency
Board of Directors
Fiscal Year
GAAP
33. Working totals
Footings
GASB
Dividends are what to SE
Interim Periods
34. 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
Contra Account
IASB
Valuation
35. It's usual balance and is the side (debit or credit) that increases the amount.
IASB
Steps for Income Summary Account
Normal Balance
Cash Basis of Accounting
36. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Stockholder's Equity
Expenses are what to SE..
When expenses exceed revenues..
Mutual Agency
37. 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.
Depreciation
Going Concern
Valuation Issue
Cash Basis of Accounting
38. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Corporations
Deferral
FASB
Valuation Issue
39. Contributed Capital + Retained Earnings
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40. Revenues that a company has earned but for which no entry has been made in the accounting records
'Big Bath Theory'
Not recorded as transactions
Carrying Value
Accrued revenues
41. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Board of Directors
Normal Balance
Accounting Equation
42. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Cost Principle
Earnings Management
When expenses exceed revenues..
Valuation
43. Increases
Revenues are what to SE..
Operating Activities
Recognition
Contra Account
44. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Continuity
Final Trial Balance
Recognizing Unrecorded Expenses (RUE)
Valuation Issue
45. The estimation of business's net income in terms of accounting periods.
Net Income =
Stockholder's Equity =
Permanent Accounts (Real Accounts)
Periodicity
46. Choosing the number of accounting periods
Board of Directors
Continuity
Corporations
Deferral
47. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
We Recognize A Transaction
Recognition
Accumulated Depreciation Accounts
48. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Stockholder's Equity =
Balance Sheet
SEC Requirements for transactions
Post-closing trial balance
49. The amount allocated to any one accounting period.
Net Income =
Recognizing Unrecorded Expenses (RUE)
Valuation
Depreciation
50. Cash account
Adjusting entries NEVER affect..
Accrued Expenses
Dividends are what to SE
FASB