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