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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. As an expense and the corresponding liability accumulate.
We Recognize A Transaction
Normal Balance
Accrued Expenses
Corporations
2. Their related asset accounts on the balance sheet
Accumulated Depreciation accounts are deducted from..
Footings
SEC Requirements for transactions
Closing Entries
3. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Closing Entries
GASB
Matching Rule
FASB
4. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Revenues are what to SE..
Adjusting entries NEVER affect..
FASB
Final Trial Balance
5. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Recognition
Post-closing trial balance
Final Trial Balance
SEC Requirements for transactions
6. It's usual balance and is the side (debit or credit) that increases the amount.
We Recognize A Transaction
Normal Balance
Sole proprietorship
'Big Bath Theory'
7. Deferral of an expense! (Except land)
Closing Entries
Long term assets are..
Cost Principle
Interim Periods
8. Contributed Capital + Retained Earnings
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9. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Stockholder's Equity =
Corporations
Steps for Income Summary Account
Matching Rule
10. Accounting periods of less than a year.
Accounting Equation
Adjusted Trial Balance
Interim Periods
FASB
11. A 12 month accounting period (Vary depending on slack seasons)
Revenues are what to SE..
Fiscal Year
Sole proprietorship
Carrying Value
12. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Accrual Accounting
Recognizing unrecorded - earned revenues
Steps for Income Summary Account
Accrued Expenses
13. Selling goods and services to customers - employing managers and workers.
Accrued revenues
Operating Activities
Net Income =
Valuation
14. Payments received in advance - and deposits made on goods and services
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Balance Sheet
Going Concern
Dividends are what to SE
15. 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)
Depreciation
Consignment Sale
Events that are recorded as transactions
Not recorded as transactions
16. A net loss occurs
Consignment Sale
When expenses exceed revenues..
Net Income =
Statement of Retained Earnings:
17. Contains only balance sheet accounts.
Securities Exchange Commission (SEC)
Corporations
Final Trial Balance
Stockholder's Equity
18. Choosing the number of accounting periods
Matching Rule
Revenues are what to SE..
Continuity
Periodicity
19. 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.
Steps for Income Summary Account
Not recorded as transactions
Recognizing unrecorded - earned revenues
Consignment Sale
20. A temporary account that summarizes all revenues and expenses for the period.
Valuation
Normal Balance
Accrued revenues
Income Summary Account
21. Match expenses with the revenues that they help generate - & vice versa.
Valuation Issue
When expenses exceed revenues..
Matching Rule
Operating Activities
22. Working totals
Long term assets are..
Recognition Point
Footings
Accrual Accounting
23. 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
Going Concern
Cash Basis of Accounting
Securities Exchange Commission (SEC)
24. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
FASB
Going Concern
Net Income =
Valuation Issue
25. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Consignment Sale
Not recorded as transactions
Continuity
Mutual Agency
26. Used to accumulate the depreciation on each long-term asset
Adjusting entries NEVER affect..
Income Statement
Accumulated Depreciation Accounts
Earnings Management
27. Revenues that a company has earned but for which no entry has been made in the accounting records
Mutual Agency
Liquidity
Events that are recorded as transactions
Accrued revenues
28. Generally Accepted Accounting Principles - or guidelines for financial accounting.
GAAP
Going Concern
Valuation
Allocating recorded costs between 2 or more accounting periods (ARC)
29. Lists all accounts and their balances
Adjusting entries affect...
Cash Basis of Accounting
Adjusted Trial Balance
Events that are recorded as transactions
30. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Valuation Issue
Recognizing Unrecorded Expenses (RUE)
Footings
Cost Principle
31. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
We Recognize A Transaction
Income Summary Account
Footings
Adjusting entries NEVER affect..
32. Increases
Revenues are what to SE..
Accrued revenues
Fiscal Year
GAAP
33. Sole worker of your business
When expenses exceed revenues..
Continuity
Sole proprietorship
Board of Directors
34. Decreases
GASB
Consignment Sale
Expenses are what to SE..
Continuity
35. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Revenues are what to SE..
Final Trial Balance
Cash Basis of Accounting
Permanent Accounts (Real Accounts)
36. The amount allocated to any one accounting period.
Mutual Agency
Depreciation
Accumulated Depreciation Accounts
Recognition Point
37. 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
Long term assets are..
Adjusted Trial Balance
Cash Basis of Accounting
38. Customer buys a service - company pays an employee for service - company performs service
Deferral
Adjusting entries NEVER affect..
Long term assets are..
Events that are recorded as transactions
39. International Accounting Standards Board.
IASB
Expenses are what to SE..
Events that are recorded as transactions
Contra Account
40. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Consignment Sale
Accounting Equation
Mutual Agency
Cost Principle
41. Revenues - Expenses
Net Income =
Going Concern
We Recognize A Transaction
Adjusted Trial Balance
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
Statement of Retained Earnings:
Accrued revenues
Accrual Accounting
Permanent Accounts (Real Accounts)
43. The net amount - or 'Book Value' of an asset
Recognition Point
Accumulated Depreciation Accounts
Closing Entries
Carrying Value
44. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Normal Balance
IASB
Allocating recorded costs between 2 or more accounting periods (ARC)
Recognizing Unrecorded Expenses (RUE)
45. A separate account that is paired with a related account
Contra Account
GASB
Interim Periods
Continuity Assumption
46. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
Interim Periods
Cost Principle
Earnings Management
47. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Allocating recorded costs between 2 or more accounting periods (ARC)
FASB
Valuation
48. 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
Long term assets are..
Accrued revenues
Depreciation
49. If you're having a bad year - to dump everything into something else like pensions
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50. 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.
Going Concern
Deferral
Cash Basis of Accounting
Securities Exchange Commission (SEC)