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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. Revenues - Expenses
When expenses exceed revenues..
Net Income =
IASB
Stockholder's Equity =
2. Working totals
Interim Periods
Carrying Value
Long term assets are..
Footings
3. Generally Accepted Accounting Principles - or guidelines for financial accounting.
IASB
Allocating recorded costs between 2 or more accounting periods (ARC)
GAAP
Income Statement
4. People that estimate various things
Expenses are what to SE..
Actuaries
Post-closing trial balance
Accumulated Depreciation accounts are deducted from..
5. The amount allocated to any one accounting period.
Board of Directors
Consignment Sale
Depreciation
Steps for Income Summary Account
6. 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
Going Concern
IASB
Accrual Accounting
SEC Requirements for transactions
7. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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8. Payments received in advance - and deposits made on goods and services
Permanent Accounts (Real Accounts)
Accounting Equation
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Fiscal Year
9. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Mutual Agency
Revenues are what to SE..
Liquidity
Going Concern
10. The net amount - or 'Book Value' of an asset
Carrying Value
Continuity Assumption
Cost Principle
Accumulated Depreciation accounts are deducted from..
11. The difficulty of deciding when a business transaction should be recorded
Accumulated Depreciation Accounts
Recognition
Securities Exchange Commission (SEC)
Normal Balance
12. As an expense and the corresponding liability accumulate.
Long term assets are..
Accrued Expenses
Recognition
Liquidity
13. Cash account
Valuation
Adjusting entries NEVER affect..
'Big Bath Theory'
When expenses exceed revenues..
14. Their related asset accounts on the balance sheet
Deferral
Accounting Equation
Accumulated Depreciation accounts are deducted from..
Sole proprietorship
15. 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
GASB
Permanent Accounts (Real Accounts)
Valuation Issue
16. 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 =
Statement of Retained Earnings:
Long term assets are..
Mutual Agency
17. If you're having a bad year - to dump everything into something else like pensions
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18. 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
Matching Rule
Recognition
Going Concern
19. A temporary account that summarizes all revenues and expenses for the period.
Deferral
Income Summary Account
Statement of Retained Earnings:
Revenues are what to SE..
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.
GASB
Recognizing unrecorded - earned revenues
Stockholder's Equity
Cost Principle
21. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
When expenses exceed revenues..
We Recognize A Transaction
Dividends are what to SE
Recognition Point
22. Revenues that a company has earned but for which no entry has been made in the accounting records
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Liquidity
Depreciation
Accrued revenues
23. Customer buys a service - company pays an employee for service - company performs service
Balance Sheet
GASB
Matching Rule
Events that are recorded as transactions
24. Accounting periods of less than a year.
Interim Periods
Depreciation
Valuation Issue
Recognizing unrecorded - earned revenues
25. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Matching Rule
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognizing Unrecorded Expenses (RUE)
Corporations
26. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
FASB
Revenues are what to SE..
IASB
Carrying Value
27. Accounting Equation
Net Income =
Long term assets are..
Accounting Equation
Liquidity
28. It's usual balance and is the side (debit or credit) that increases the amount.
Net Income =
Mutual Agency
Accrued revenues
Normal Balance
29. Increases
Revenues are what to SE..
Accumulated Depreciation accounts are deducted from..
When expenses exceed revenues..
Allocating recorded costs between 2 or more accounting periods (ARC)
30. Decreases
SEC Requirements for transactions
Adjusting entries affect...
Mutual Agency
Expenses are what to SE..
31. A separate account that is paired with a related account
Events that are recorded as transactions
Liquidity
Statement of Retained Earnings:
Contra Account
32. 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)
'Big Bath Theory'
Final Trial Balance
Events that are recorded as transactions
33. Used to accumulate the depreciation on each long-term asset
Balance Sheet
Accumulated Depreciation Accounts
Income Summary Account
FASB
34. The predetermined time at which a transaction should be recorded.
Stockholder's Equity
Recognition Point
Depreciation
Contra Account
35. The manipulation of revenues and expenses to achieve a specific outcome.
Adjusting entries NEVER affect..
'Big Bath Theory'
Earnings Management
Securities Exchange Commission (SEC)
36. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Adjusting entries affect...
Interim Periods
Recognizing Unrecorded Expenses (RUE)
Valuation
37. Selling goods and services to customers - employing managers and workers.
FASB
Contra Account
Not recorded as transactions
Operating Activities
38. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Allocating recorded costs between 2 or more accounting periods (ARC)
Valuation
Carrying Value
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
39. Contributed Capital + Retained Earnings
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40. A 12 month accounting period (Vary depending on slack seasons)
Consignment Sale
SEC Requirements for transactions
Fiscal Year
Securities Exchange Commission (SEC)
41. The ability to have enough cash to pay debts when they are due.
'Big Bath Theory'
GASB
Securities Exchange Commission (SEC)
Liquidity
42. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Net Income =
We Recognize A Transaction
'Big Bath Theory'
43. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Contra Account
SEC Requirements for transactions
Cash Basis of Accounting
Matching Rule
44. Determines corporate policy - declares dividends and appoints management.
Recognition
Board of Directors
Consignment Sale
Normal Balance
45. Shows the changes in RE over an accounting period.
GAAP
Net Income =
Statement of Retained Earnings:
Valuation
46. Sole worker of your business
Securities Exchange Commission (SEC)
Sole proprietorship
Adjusted Trial Balance
Actuaries
47. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
GASB
Corporations
Stockholder's Equity =
Liquidity
48. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Securities Exchange Commission (SEC)
Stockholder's Equity
Recognizing Unrecorded Expenses (RUE)
Balance Sheet
49. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Post-closing trial balance
Statement of Retained Earnings:
Periodicity
Steps for Income Summary Account
50. The practice of recording transactions at exchange price at the point of recognition.
Cash Basis of Accounting
FASB
Recognition Point
Cost Principle