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Test your basic knowledge |
CLEP Financial Accounting
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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. Customer buys a service - company pays an employee for service - company performs service
We Recognize A Transaction
Accrued revenues
Events that are recorded as transactions
Stockholder's Equity
2. Cash account
Adjusting entries NEVER affect..
Expenses are what to SE..
Cash Basis of Accounting
Accounting Equation
3. International Accounting Standards Board.
Interim Periods
IASB
Net Income =
Accumulated Depreciation accounts are deducted from..
4. If you're having a bad year - to dump everything into something else like pensions
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5. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Mutual Agency
Earnings Management
We Recognize A Transaction
Dividends are what to SE
6. The predetermined time at which a transaction should be recorded.
Accounting Equation
Recognition Point
Continuity
Liquidity
7. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Revenues are what to SE..
Recognizing unrecorded - earned revenues
Post-closing trial balance
Consignment Sale
8. Postponement of recognition of an expense already paid.
Income Summary Account
Deferral
Final Trial Balance
'Big Bath Theory'
9. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Statement of Retained Earnings:
Net Income =
Adjusted Trial Balance
10. Used to accumulate the depreciation on each long-term asset
Accumulated Depreciation Accounts
Contra Account
Depreciation
Consignment Sale
11. The estimation of business's net income in terms of accounting periods.
Statement of Retained Earnings:
Periodicity
Accrued Expenses
GASB
12. A 12 month accounting period (Vary depending on slack seasons)
Revenues are what to SE..
Fiscal Year
Periodicity
Permanent Accounts (Real Accounts)
13. Their related asset accounts on the balance sheet
Continuity
IASB
Accumulated Depreciation accounts are deducted from..
Sole proprietorship
14. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Interim Periods
GASB
Mutual Agency
Valuation
15. Accounting Equation
Board of Directors
Accounting Equation
Consignment Sale
Cash Basis of Accounting
16. Increases
Dividends are what to SE
Revenues are what to SE..
Recognition Point
SEC Requirements for transactions
17. 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
Events that are recorded as transactions
Depreciation
Earnings Management
18. Match expenses with the revenues that they help generate - & vice versa.
Matching Rule
Adjusted Trial Balance
Permanent Accounts (Real Accounts)
Liquidity
19. A temporary account that summarizes all revenues and expenses for the period.
Events that are recorded as transactions
Income Summary Account
GASB
Valuation
20. Choosing the number of accounting periods
Continuity
Stockholder's Equity
Statement of Retained Earnings:
Periodicity
21. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
FASB
Adjusting entries NEVER affect..
Sole proprietorship
Steps for Income Summary Account
22. It's usual balance and is the side (debit or credit) that increases the amount.
Valuation
When expenses exceed revenues..
Normal Balance
Steps for Income Summary Account
23. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Mutual Agency
Deferral
Expenses are what to SE..
Adjusting entries affect...
24. A separate account that is paired with a related account
Recognition
Contra Account
Recognition Point
Final Trial Balance
25. Accounting periods of less than a year.
IASB
Valuation Issue
Interim Periods
Periodicity
26. 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
Closing Entries
SEC Requirements for transactions
Normal Balance
When expenses exceed revenues..
27. Revenues - Expenses
Net Income =
Accumulated Depreciation Accounts
Actuaries
Depreciation
28. Payments received in advance - and deposits made on goods and services
Mutual Agency
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Final Trial Balance
Allocating recorded costs between 2 or more accounting periods (ARC)
29. Revenues that a company has earned but for which no entry has been made in the accounting records
SEC Requirements for transactions
Accrued revenues
Consignment Sale
Normal Balance
30. Decreases
Statement of Retained Earnings:
Liquidity
Expenses are what to SE..
Accumulated Depreciation Accounts
31. Contributed Capital + Retained Earnings
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32. The manipulation of revenues and expenses to achieve a specific outcome.
Earnings Management
Not recorded as transactions
Board of Directors
Accrual Accounting
33. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Permanent Accounts (Real Accounts)
Recognizing Unrecorded Expenses (RUE)
Valuation Issue
Matching Rule
34. Decreases
Dividends are what to SE
Carrying Value
Sole proprietorship
GAAP
35. Lists all accounts and their balances
Dividends are what to SE
Revenues are what to SE..
Adjusted Trial Balance
Stockholder's Equity
36. The net amount - or 'Book Value' of an asset
Actuaries
Fiscal Year
Carrying Value
Sole proprietorship
37. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
GAAP
Mutual Agency
Allocating recorded costs between 2 or more accounting periods (ARC)
Revenues are what to SE..
38. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Recognition Point
Balance Sheet
Periodicity
Continuity Assumption
39. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Earnings Management
FASB
Recognition Point
Depreciation
40. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Valuation
Adjusting entries NEVER affect..
GASB
'Big Bath Theory'
41. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Going Concern
Long term assets are..
GAAP
SEC Requirements for transactions
42. 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
FASB
Accrual Accounting
Allocating recorded costs between 2 or more accounting periods (ARC)
Securities Exchange Commission (SEC)
43. Sole worker of your business
We Recognize A Transaction
Final Trial Balance
Sole proprietorship
Balance Sheet
44. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
FASB
Normal Balance
Corporations
SEC Requirements for transactions
45. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
IASB
Stockholder's Equity
Not recorded as transactions
Accrual Accounting
46. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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47. Contains only balance sheet accounts.
Final Trial Balance
IASB
Interim Periods
Earnings Management
48. The ability to have enough cash to pay debts when they are due.
Fiscal Year
Liquidity
Closing Entries
Accumulated Depreciation accounts are deducted from..
49. As an expense and the corresponding liability accumulate.
Operating Activities
Deferral
Accrued Expenses
Going Concern
50. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Final Trial Balance
Long term assets are..
Closing Entries
Securities Exchange Commission (SEC)
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