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