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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 net amount - or 'Book Value' of an asset
Final Trial Balance
'Big Bath Theory'
Carrying Value
Recognition Point
2. Accounting periods of less than a year.
Allocating recorded costs between 2 or more accounting periods (ARC)
Closing Entries
Interim Periods
Income Statement
3. Increases
Matching Rule
Revenues are what to SE..
Cash Basis of Accounting
Corporations
4. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Accrual Accounting
Going Concern
Board of Directors
Post-closing trial balance
5. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Continuity Assumption
Liquidity
When expenses exceed revenues..
6. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
7. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Closing Entries
Continuity
GAAP
Footings
8. Payments received in advance - and deposits made on goods and services
Periodicity
Accumulated Depreciation accounts are deducted from..
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
IASB
9. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Deferral
FASB
Recognizing unrecorded - earned revenues
Accounting Equation
10. Lists all accounts and their balances
Fiscal Year
Adjusted Trial Balance
Accounting Equation
SEC Requirements for transactions
11. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Depreciation
Matching Rule
Mutual Agency
Accounting Equation
12. A net loss occurs
Carrying Value
When expenses exceed revenues..
Earnings Management
Going Concern
13. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
IASB
Balance Sheet
Accrued revenues
Sole proprietorship
14. The manipulation of revenues and expenses to achieve a specific outcome.
Earnings Management
Statement of Retained Earnings:
Final Trial Balance
Adjusting entries affect...
15. 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.
Board of Directors
Closing Entries
Cash Basis of Accounting
Deferral
16. 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
Interim Periods
Accrual Accounting
Income Summary Account
IASB
17. Customer buys a service - company pays an employee for service - company performs service
Sole proprietorship
Final Trial Balance
Events that are recorded as transactions
Actuaries
18. The predetermined time at which a transaction should be recorded.
Accumulated Depreciation Accounts
Cost Principle
Recognition Point
Footings
19. The amount allocated to any one accounting period.
Depreciation
Fiscal Year
We Recognize A Transaction
Continuity Assumption
20. Accounting Equation
Recognizing Unrecorded Expenses (RUE)
Dividends are what to SE
Accounting Equation
Recognizing unrecorded - earned revenues
21. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Steps for Income Summary Account
Fiscal Year
Depreciation
22. Revenues - Expenses
Valuation Issue
Net Income =
Corporations
Long term assets are..
23. Choosing the number of accounting periods
Periodicity
Recognition Point
Continuity
Accrued Expenses
24. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Not recorded as transactions
Adjusting entries NEVER affect..
Securities Exchange Commission (SEC)
Permanent Accounts (Real Accounts)
25. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Accrual Accounting
Mutual Agency
Valuation Issue
Deferral
26. Selling goods and services to customers - employing managers and workers.
Continuity Assumption
Revenues are what to SE..
Operating Activities
Recognizing unrecorded - earned revenues
27. 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.
Closing Entries
Recognizing unrecorded - earned revenues
Income Statement
Dividends are what to SE
28. The estimation of business's net income in terms of accounting periods.
Allocating recorded costs between 2 or more accounting periods (ARC)
Accumulated Depreciation accounts are deducted from..
IASB
Periodicity
29. Their related asset accounts on the balance sheet
Normal Balance
Dividends are what to SE
Accumulated Depreciation accounts are deducted from..
Recognizing unrecorded - earned revenues
30. Sole worker of your business
Adjusting entries NEVER affect..
GAAP
Valuation Issue
Sole proprietorship
31. People that estimate various things
Actuaries
Post-closing trial balance
Final Trial Balance
Liquidity
32. Deferral of an expense! (Except land)
Recognizing Unrecorded Expenses (RUE)
Accrued revenues
Long term assets are..
Contra Account
33. A separate account that is paired with a related account
Balance Sheet
Contra Account
Dividends are what to SE
Going Concern
34. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Continuity Assumption
We Recognize A Transaction
Balance Sheet
Cash Basis of Accounting
35. It's usual balance and is the side (debit or credit) that increases the amount.
Cost Principle
Continuity
Accrual Accounting
Normal Balance
36. 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)
Adjusting entries affect...
Accumulated Depreciation Accounts
Accrued Expenses
37. If you're having a bad year - to dump everything into something else like pensions
38. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Accumulated Depreciation accounts are deducted from..
Cash Basis of Accounting
Board of Directors
39. International Accounting Standards Board.
Accrual Accounting
IASB
Securities Exchange Commission (SEC)
Depreciation
40. 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
Dividends are what to SE
GAAP
Adjusting entries affect...
Income Statement
41. Contains only balance sheet accounts.
Stockholder's Equity =
Final Trial Balance
Recognition
Consignment Sale
42. Shows the changes in RE over an accounting period.
GASB
Matching Rule
Operating Activities
Statement of Retained Earnings:
43. Postponement of recognition of an expense already paid.
Long term assets are..
Statement of Retained Earnings:
We Recognize A Transaction
Deferral
44. Decreases
Contra Account
IASB
Expenses are what to SE..
Accrual Accounting
45. Determines corporate policy - declares dividends and appoints management.
Board of Directors
Accrued revenues
Recognizing unrecorded - earned revenues
Accumulated Depreciation Accounts
46. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Steps for Income Summary Account
Deferral
Adjusting entries affect...
Board of Directors
47. Revenues that a company has earned but for which no entry has been made in the accounting records
Interim Periods
Adjusting entries NEVER affect..
Accrued revenues
Continuity Assumption
48. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
We Recognize A Transaction
Recognizing Unrecorded Expenses (RUE)
SEC Requirements for transactions
Net Income =
49. The ability to have enough cash to pay debts when they are due.
Not recorded as transactions
Periodicity
Closing Entries
Liquidity
50. Match expenses with the revenues that they help generate - & vice versa.
Recognition Point
Matching Rule
Accrued Expenses
Recognizing Unrecorded Expenses (RUE)