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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. Choosing the number of accounting periods
IASB
Continuity
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Footings
2. The ability to have enough cash to pay debts when they are due.
Fiscal Year
Liquidity
Cost Principle
Mutual Agency
3. As an expense and the corresponding liability accumulate.
Statement of Retained Earnings:
Accrued Expenses
Expenses are what to SE..
GAAP
4. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Long term assets are..
Recognition Point
Consignment Sale
Post-closing trial balance
5. Accounting Equation
Accounting Equation
SEC Requirements for transactions
Adjusted Trial Balance
Footings
6. People that estimate various things
Income Statement
Matching Rule
Recognition Point
Actuaries
7. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Closing Entries
Cash Basis of Accounting
Fiscal Year
Not recorded as transactions
8. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Revenues are what to SE..
Cost Principle
Recognizing Unrecorded Expenses (RUE)
Closing Entries
9. Accounting periods of less than a year.
Interim Periods
Events that are recorded as transactions
Recognizing Unrecorded Expenses (RUE)
Depreciation
10. The difficulty of deciding when a business transaction should be recorded
Recognition
Revenues are what to SE..
When expenses exceed revenues..
Continuity Assumption
11. Decreases
Dividends are what to SE
Deferral
Corporations
Periodicity
12. 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
Steps for Income Summary Account
Long term assets are..
Accrual Accounting
Final Trial Balance
13. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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14. Contributed Capital + Retained Earnings
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15. Payments received in advance - and deposits made on goods and services
Long term assets are..
Normal Balance
Income Summary Account
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
16. Increases
Revenues are what to SE..
Closing Entries
Footings
IASB
17. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
We Recognize A Transaction
Going Concern
Recognizing unrecorded - earned revenues
18. A separate account that is paired with a related account
Long term assets are..
Final Trial Balance
Liquidity
Contra Account
19. Customer buys a service - company pays an employee for service - company performs service
Sole proprietorship
Fiscal Year
Actuaries
Events that are recorded as transactions
20. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Balance Sheet
When expenses exceed revenues..
Securities Exchange Commission (SEC)
Dividends are what to SE
21. Selling goods and services to customers - employing managers and workers.
Continuity
Operating Activities
Permanent Accounts (Real Accounts)
Periodicity
22. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Securities Exchange Commission (SEC)
Balance Sheet
Fiscal Year
Normal Balance
23. If you're having a bad year - to dump everything into something else like pensions
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24. 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)
Consignment Sale
Corporations
Carrying Value
Actuaries
25. Sole worker of your business
Sole proprietorship
Accumulated Depreciation accounts are deducted from..
Depreciation
Carrying Value
26. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Valuation
Interim Periods
Recognizing Unrecorded Expenses (RUE)
27. The amount allocated to any one accounting period.
Deferral
Depreciation
Recognizing unrecorded - earned revenues
Allocating recorded costs between 2 or more accounting periods (ARC)
28. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Corporations
Cost Principle
Deferral
Recognition
29. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Sole proprietorship
Recognition
Accrued Expenses
Adjusting entries affect...
30. A 12 month accounting period (Vary depending on slack seasons)
Matching Rule
Consignment Sale
Fiscal Year
Cost Principle
31. Determines corporate policy - declares dividends and appoints management.
Net Income =
Board of Directors
Cost Principle
Sole proprietorship
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)
Events that are recorded as transactions
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Net Income =
33. Revenues - Expenses
Continuity Assumption
GASB
Net Income =
GAAP
34. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Closing Entries
Stockholder's Equity
Periodicity
Allocating recorded costs between 2 or more accounting periods (ARC)
35. The practice of recording transactions at exchange price at the point of recognition.
SEC Requirements for transactions
Cost Principle
Income Summary Account
Not recorded as transactions
36. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
GAAP
Accrual Accounting
Recognizing Unrecorded Expenses (RUE)
37. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Corporations
Earnings Management
Going Concern
Footings
38. 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
Steps for Income Summary Account
Going Concern
Accrued revenues
39. The predetermined time at which a transaction should be recorded.
Statement of Retained Earnings:
Recognition Point
Expenses are what to SE..
Normal Balance
40. 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
Securities Exchange Commission (SEC)
Closing Entries
Recognition
41. A temporary account that summarizes all revenues and expenses for the period.
Income Summary Account
'Big Bath Theory'
Accumulated Depreciation Accounts
Balance Sheet
42. International Accounting Standards Board.
Consignment Sale
IASB
Recognition
'Big Bath Theory'
43. 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.
Accounting Equation
Income Statement
Recognizing unrecorded - earned revenues
When expenses exceed revenues..
44. Their related asset accounts on the balance sheet
Board of Directors
Adjusting entries affect...
Accumulated Depreciation accounts are deducted from..
Liquidity
45. Match expenses with the revenues that they help generate - & vice versa.
Continuity Assumption
Post-closing trial balance
Matching Rule
Long term assets are..
46. Working totals
Periodicity
Footings
Accounting Equation
Allocating recorded costs between 2 or more accounting periods (ARC)
47. 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
Footings
Closing Entries
Expenses are what to SE..
SEC Requirements for transactions
48. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Accrual Accounting
Stockholder's Equity =
GAAP
IASB
49. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Dividends are what to SE
FASB
Mutual Agency
Liquidity
50. Used to accumulate the depreciation on each long-term asset
Accumulated Depreciation Accounts
Post-closing trial balance
Adjusted Trial Balance
Sole proprietorship