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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. 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
Valuation Issue
Income Statement
Closing Entries
Mutual Agency
2. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Matching Rule
Balance Sheet
SEC Requirements for transactions
Post-closing trial balance
3. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Continuity Assumption
Long term assets are..
GAAP
Carrying Value
4. Selling goods and services to customers - employing managers and workers.
Deferral
Securities Exchange Commission (SEC)
GAAP
Operating Activities
5. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
IASB
Securities Exchange Commission (SEC)
Events that are recorded as transactions
Board of Directors
6. Contains only balance sheet accounts.
Sole proprietorship
SEC Requirements for transactions
Final Trial Balance
Valuation Issue
7. It's usual balance and is the side (debit or credit) that increases the amount.
Normal Balance
Matching Rule
When expenses exceed revenues..
Adjusting entries affect...
8. 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.
Adjusting entries NEVER affect..
Cash Basis of Accounting
Periodicity
Fiscal Year
9. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
GASB
Cost Principle
Sole proprietorship
10. Accounting Equation
Accounting Equation
Sole proprietorship
Allocating recorded costs between 2 or more accounting periods (ARC)
Earnings Management
11. Accounting periods of less than a year.
Allocating recorded costs between 2 or more accounting periods (ARC)
Accumulated Depreciation Accounts
Interim Periods
Valuation Issue
12. Choosing the number of accounting periods
Continuity
Events that are recorded as transactions
Stockholder's Equity
Adjusted Trial Balance
13. Decreases
Expenses are what to SE..
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Adjusted Trial Balance
GASB
14. As an expense and the corresponding liability accumulate.
'Big Bath Theory'
Adjusting entries NEVER affect..
Accrued Expenses
Final Trial Balance
15. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Cash Basis of Accounting
Continuity Assumption
Accumulated Depreciation Accounts
We Recognize A Transaction
16. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Accumulated Depreciation Accounts
Accrual Accounting
Going Concern
FASB
17. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Closing Entries
Deferral
Accumulated Depreciation accounts are deducted from..
Corporations
18. Cash account
Valuation
Adjusting entries NEVER affect..
Net Income =
GAAP
19. Contributed Capital + Retained Earnings
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20. International Accounting Standards Board.
'Big Bath Theory'
IASB
Continuity
Recognizing unrecorded - earned revenues
21. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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22. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Mutual Agency
Accrued revenues
Steps for Income Summary Account
23. Working totals
GASB
Actuaries
Adjusted Trial Balance
Footings
24. 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
Actuaries
Accrual Accounting
Net Income =
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
25. Decreases
Income Statement
Dividends are what to SE
IASB
Steps for Income Summary Account
26. Shows the changes in RE over an accounting period.
Statement of Retained Earnings:
SEC Requirements for transactions
Board of Directors
Events that are recorded as transactions
27. A temporary account that summarizes all revenues and expenses for the period.
Income Summary Account
We Recognize A Transaction
Accrual Accounting
Not recorded as transactions
28. The estimation of business's net income in terms of accounting periods.
Accumulated Depreciation accounts are deducted from..
FASB
Periodicity
Going Concern
29. Used to accumulate the depreciation on each long-term asset
Balance Sheet
Cost Principle
Footings
Accumulated Depreciation Accounts
30. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Revenues are what to SE..
Not recorded as transactions
Recognizing unrecorded - earned revenues
Balance Sheet
31. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Mutual Agency
Normal Balance
Accrued Expenses
Continuity
32. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Stockholder's Equity
Accrual Accounting
Steps for Income Summary Account
Cash Basis of Accounting
33. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Expenses are what to SE..
Valuation Issue
Recognizing Unrecorded Expenses (RUE)
Recognition Point
34. The predetermined time at which a transaction should be recorded.
Interim Periods
Mutual Agency
Recognition Point
Earnings Management
35. A net loss occurs
When expenses exceed revenues..
Normal Balance
Not recorded as transactions
Balance Sheet
36. Determines corporate policy - declares dividends and appoints management.
Valuation
Board of Directors
Consignment Sale
Accumulated Depreciation Accounts
37. Deferral of an expense! (Except land)
Continuity
Long term assets are..
Securities Exchange Commission (SEC)
Actuaries
38. 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
Securities Exchange Commission (SEC)
Final Trial Balance
Expenses are what to SE..
39. Revenues - Expenses
SEC Requirements for transactions
Normal Balance
Net Income =
Post-closing trial balance
40. If you're having a bad year - to dump everything into something else like pensions
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41. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Valuation
Final Trial Balance
Permanent Accounts (Real Accounts)
Net Income =
42. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Closing Entries
Adjusting entries NEVER affect..
Interim Periods
Allocating recorded costs between 2 or more accounting periods (ARC)
43. The amount allocated to any one accounting period.
Depreciation
Accounting Equation
Continuity
Stockholder's Equity =
44. Their related asset accounts on the balance sheet
Post-closing trial balance
Recognizing Unrecorded Expenses (RUE)
Accumulated Depreciation accounts are deducted from..
Revenues are what to SE..
45. The ability to have enough cash to pay debts when they are due.
Allocating recorded costs between 2 or more accounting periods (ARC)
Liquidity
Income Summary Account
GASB
46. Sole worker of your business
Sole proprietorship
Contra Account
Operating Activities
Consignment Sale
47. A 12 month accounting period (Vary depending on slack seasons)
Allocating recorded costs between 2 or more accounting periods (ARC)
Fiscal Year
Operating Activities
Securities Exchange Commission (SEC)
48. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Accrued revenues
Revenues are what to SE..
GASB
SEC Requirements for transactions
49. People that estimate various things
Liquidity
Steps for Income Summary Account
Cash Basis of Accounting
Actuaries
50. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
GASB
Continuity Assumption
Carrying Value
Periodicity