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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. Match expenses with the revenues that they help generate - & vice versa.
Accrual Accounting
Matching Rule
GASB
Adjusted Trial Balance
2. International Accounting Standards Board.
Cash Basis of Accounting
Statement of Retained Earnings:
Permanent Accounts (Real Accounts)
IASB
3. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Recognizing Unrecorded Expenses (RUE)
FASB
Stockholder's Equity =
Actuaries
4. 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
Expenses are what to SE..
Board of Directors
Periodicity
5. Their related asset accounts on the balance sheet
FASB
Accumulated Depreciation Accounts
Events that are recorded as transactions
Accumulated Depreciation accounts are deducted from..
6. Cash account
Consignment Sale
Adjusting entries NEVER affect..
Closing Entries
Mutual Agency
7. Used to accumulate the depreciation on each long-term asset
Corporations
Accumulated Depreciation Accounts
Mutual Agency
Adjusting entries affect...
8. The practice of recording transactions at exchange price at the point of recognition.
Post-closing trial balance
Consignment Sale
Securities Exchange Commission (SEC)
Cost Principle
9. Increases
Income Statement
Dividends are what to SE
Stockholder's Equity
Revenues are what to SE..
10. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
Continuity Assumption
GASB
Contra Account
Continuity
11. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Closing Entries
Not recorded as transactions
Corporations
Earnings Management
12. Deferral of an expense! (Except land)
Events that are recorded as transactions
Long term assets are..
Consignment Sale
Continuity
13. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrued revenues
Carrying Value
Post-closing trial balance
Interim Periods
14. It's usual balance and is the side (debit or credit) that increases the amount.
Normal Balance
Net Income =
'Big Bath Theory'
Permanent Accounts (Real Accounts)
15. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Net Income =
Valuation Issue
Footings
16. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Normal Balance
Closing Entries
Balance Sheet
Mutual Agency
17. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Not recorded as transactions
Steps for Income Summary Account
Post-closing trial balance
Accumulated Depreciation Accounts
18. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Normal Balance
Adjusting entries affect...
Permanent Accounts (Real Accounts)
Continuity Assumption
19. Accounting Equation
Securities Exchange Commission (SEC)
Accounting Equation
GASB
Revenues are what to SE..
20. Payments received in advance - and deposits made on goods and services
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Cost Principle
GAAP
Recognition Point
21. The difficulty of deciding when a business transaction should be recorded
Recognition
When expenses exceed revenues..
Going Concern
Stockholder's Equity =
22. A net loss occurs
Stockholder's Equity =
Stockholder's Equity
When expenses exceed revenues..
Accumulated Depreciation Accounts
23. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Closing Entries
Going Concern
Steps for Income Summary Account
Balance Sheet
24. Lists all accounts and their balances
Actuaries
Cost Principle
We Recognize A Transaction
Adjusted Trial Balance
25. 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)
Contra Account
Revenues are what to SE..
Balance Sheet
26. Customer buys a service - company pays an employee for service - company performs service
Adjusting entries affect...
Events that are recorded as transactions
Actuaries
SEC Requirements for transactions
27. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Recognition
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Accrual Accounting
Allocating recorded costs between 2 or more accounting periods (ARC)
28. 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
Recognition Point
Accrued Expenses
Accrual Accounting
Steps for Income Summary Account
29. Sole worker of your business
Normal Balance
Sole proprietorship
Final Trial Balance
Carrying Value
30. The ability to have enough cash to pay debts when they are due.
Depreciation
Liquidity
Going Concern
Accrual Accounting
31. If you're having a bad year - to dump everything into something else like pensions
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32. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Sole proprietorship
Mutual Agency
Continuity Assumption
Post-closing trial balance
33. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
Matching Rule
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Normal Balance
34. A temporary account that summarizes all revenues and expenses for the period.
FASB
Income Summary Account
Accrual Accounting
Accumulated Depreciation Accounts
35. 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.
Events that are recorded as transactions
Balance Sheet
Cash Basis of Accounting
Corporations
36. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
SEC Requirements for transactions
We Recognize A Transaction
Accounting Equation
37. Contributed Capital + Retained Earnings
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38. Working totals
Recognition Point
Board of Directors
Footings
Operating Activities
39. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Operating Activities
Valuation
Dividends are what to SE
Contra Account
40. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Interim Periods
Continuity Assumption
We Recognize A Transaction
Accumulated Depreciation Accounts
41. The net amount - or 'Book Value' of an asset
IASB
Carrying Value
Income Summary Account
Permanent Accounts (Real Accounts)
42. As an expense and the corresponding liability accumulate.
Accrued Expenses
Periodicity
Securities Exchange Commission (SEC)
Accrual Accounting
43. Decreases
Normal Balance
Expenses are what to SE..
Closing Entries
Balance Sheet
44. The manipulation of revenues and expenses to achieve a specific outcome.
GASB
Steps for Income Summary Account
Earnings Management
FASB
45. Postponement of recognition of an expense already paid.
Deferral
Allocating recorded costs between 2 or more accounting periods (ARC)
Interim Periods
Events that are recorded as transactions
46. 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.
Final Trial Balance
Accrual Accounting
Recognizing unrecorded - earned revenues
Operating Activities
47. Determines corporate policy - declares dividends and appoints management.
Board of Directors
GASB
Corporations
Valuation Issue
48. The estimation of business's net income in terms of accounting periods.
Periodicity
Sole proprietorship
Adjusting entries affect...
Deferral
49. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Statement of Retained Earnings:
Liquidity
Recognizing Unrecorded Expenses (RUE)
Going Concern
50. Revenues - Expenses
Adjusting entries NEVER affect..
Deferral
Liquidity
Net Income =