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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. The amount allocated to any one accounting period.
Recognition Point
Depreciation
Earnings Management
Actuaries
2. Revenues - Expenses
When expenses exceed revenues..
Net Income =
Cash Basis of Accounting
SEC Requirements for transactions
3. Accounting Equation
Accrued revenues
Sole proprietorship
Corporations
Accounting Equation
4. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Accounting Equation
Accrued Expenses
Normal Balance
We Recognize A Transaction
5. Lists all accounts and their balances
'Big Bath Theory'
Adjusted Trial Balance
Fiscal Year
Operating Activities
6. The net amount - or 'Book Value' of an asset
Carrying Value
Depreciation
Stockholder's Equity
Adjusting entries affect...
7. 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
Interim Periods
Allocating recorded costs between 2 or more accounting periods (ARC)
8. 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)
Accounting Equation
Permanent Accounts (Real Accounts)
When expenses exceed revenues..
Consignment Sale
9. The manipulation of revenues and expenses to achieve a specific outcome.
Earnings Management
Dividends are what to SE
Cash Basis of Accounting
Recognition
10. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Post-closing trial balance
Matching Rule
Consignment Sale
Valuation
11. Postponement of recognition of an expense already paid.
Adjusting entries affect...
Deferral
Allocating recorded costs between 2 or more accounting periods (ARC)
Revenues are what to SE..
12. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Going Concern
Sole proprietorship
GASB
SEC Requirements for transactions
13. The ability to have enough cash to pay debts when they are due.
Post-closing trial balance
Accrual Accounting
Liquidity
Interim Periods
14. Accounting periods of less than a year.
Allocating recorded costs between 2 or more accounting periods (ARC)
Interim Periods
Accrued Expenses
Recognition
15. Working totals
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Footings
Not recorded as transactions
Events that are recorded as transactions
16. Increases
Continuity
Revenues are what to SE..
Stockholder's Equity
We Recognize A Transaction
17. A net loss occurs
Dividends are what to SE
When expenses exceed revenues..
Income Statement
Long term assets are..
18. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
When expenses exceed revenues..
Recognition Point
Income Summary Account
Continuity Assumption
19. People that estimate various things
Normal Balance
Income Summary Account
GASB
Actuaries
20. Selling goods and services to customers - employing managers and workers.
When expenses exceed revenues..
Final Trial Balance
Operating Activities
Income Summary Account
21. Shows the changes in RE over an accounting period.
Continuity
Statement of Retained Earnings:
GASB
Accumulated Depreciation accounts are deducted from..
22. The predetermined time at which a transaction should be recorded.
Expenses are what to SE..
Recognition Point
Allocating recorded costs between 2 or more accounting periods (ARC)
Recognizing Unrecorded Expenses (RUE)
23. The practice of recording transactions at exchange price at the point of recognition.
Income Statement
When expenses exceed revenues..
Cost Principle
Adjusting entries affect...
24. 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)
Normal Balance
Depreciation
Events that are recorded as transactions
25. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Valuation
Events that are recorded as transactions
Mutual Agency
Periodicity
26. A 12 month accounting period (Vary depending on slack seasons)
Actuaries
Fiscal Year
Closing Entries
Carrying Value
27. Sole worker of your business
Sole proprietorship
FASB
SEC Requirements for transactions
Footings
28. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
FASB
Continuity Assumption
Carrying Value
Cash Basis of Accounting
29. Cash account
Valuation Issue
We Recognize A Transaction
Permanent Accounts (Real Accounts)
Adjusting entries NEVER affect..
30. Choosing the number of accounting periods
Liquidity
IASB
Continuity
Net Income =
31. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
Actuaries
Deferral
Normal Balance
32. Decreases
Consignment Sale
Accounting Equation
Expenses are what to SE..
Continuity
33. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Footings
Adjusting entries NEVER affect..
Not recorded as transactions
GAAP
34. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Net Income =
'Big Bath Theory'
Income Summary Account
Valuation Issue
35. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Accumulated Depreciation Accounts
Adjusting entries affect...
Going Concern
Accounting Equation
36. 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
Matching Rule
Expenses are what to SE..
Closing Entries
Stockholder's Equity =
37. Deferral of an expense! (Except land)
Fiscal Year
We Recognize A Transaction
Expenses are what to SE..
Long term assets are..
38. International Accounting Standards Board.
Liquidity
Corporations
IASB
Securities Exchange Commission (SEC)
39. Contains only balance sheet accounts.
Revenues are what to SE..
Dividends are what to SE
Accrual Accounting
Final Trial Balance
40. The estimation of business's net income in terms of accounting periods.
Footings
Continuity Assumption
Periodicity
IASB
41. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Permanent Accounts (Real Accounts)
Corporations
Income Summary Account
Securities Exchange Commission (SEC)
42. Match expenses with the revenues that they help generate - & vice versa.
Matching Rule
FASB
Income Summary Account
Adjusting entries affect...
43. 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
Periodicity
Post-closing trial balance
FASB
44. Customer buys a service - company pays an employee for service - company performs service
Operating Activities
Events that are recorded as transactions
Expenses are what to SE..
Earnings Management
45. Determines corporate policy - declares dividends and appoints management.
Expenses are what to SE..
Corporations
Fiscal Year
Board of Directors
46. 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.
Interim Periods
Recognizing unrecorded - earned revenues
Expenses are what to SE..
Steps for Income Summary Account
47. Contributed Capital + Retained Earnings
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48. A temporary account that summarizes all revenues and expenses for the period.
Steps for Income Summary Account
Recognition
Recognizing unrecorded - earned revenues
Income Summary Account
49. Used to accumulate the depreciation on each long-term asset
We Recognize A Transaction
Accumulated Depreciation Accounts
Accounting Equation
Adjusting entries NEVER affect..
50. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Accumulated Depreciation Accounts
Valuation
Mutual Agency
Final Trial Balance