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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. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Deferral
Accumulated Depreciation Accounts
Valuation
Recognizing unrecorded - earned revenues
2. Cash account
Actuaries
Earnings Management
Recognition Point
Adjusting entries NEVER affect..
3. A separate account that is paired with a related account
Liquidity
Accrued Expenses
Final Trial Balance
Contra Account
4. The net amount - or 'Book Value' of an asset
SEC Requirements for transactions
Consignment Sale
Carrying Value
IASB
5. Increases
Corporations
Allocating recorded costs between 2 or more accounting periods (ARC)
Adjusting entries NEVER affect..
Revenues are what to SE..
6. The practice of recording transactions at exchange price at the point of recognition.
Cost Principle
Adjusted Trial Balance
Valuation Issue
Accrued Expenses
7. A temporary account that summarizes all revenues and expenses for the period.
Board of Directors
Adjusting entries NEVER affect..
Liquidity
Income Summary Account
8. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Accrued revenues
Recognition Point
Permanent Accounts (Real Accounts)
Earnings Management
9. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Not recorded as transactions
Revenues are what to SE..
Cost Principle
Adjusted Trial Balance
10. Determines corporate policy - declares dividends and appoints management.
Accumulated Depreciation accounts are deducted from..
Operating Activities
Board of Directors
Valuation
11. Sole worker of your business
Sole proprietorship
Recognition
Continuity
Carrying Value
12. A net loss occurs
Dividends are what to SE
Statement of Retained Earnings:
When expenses exceed revenues..
Recognition
13. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
IASB
Balance Sheet
GASB
Recognition Point
14. Decreases
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Expenses are what to SE..
Footings
Periodicity
15. The ability to have enough cash to pay debts when they are due.
Expenses are what to SE..
Stockholder's Equity =
Liquidity
Adjusted Trial Balance
16. The estimation of business's net income in terms of accounting periods.
Periodicity
Expenses are what to SE..
Valuation
Revenues are what to SE..
17. 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.
Cash Basis of Accounting
Carrying Value
Continuity Assumption
Statement of Retained Earnings:
18. Used to accumulate the depreciation on each long-term asset
SEC Requirements for transactions
Accumulated Depreciation Accounts
Accounting Equation
Recognizing unrecorded - earned revenues
19. The difficulty of deciding when a business transaction should be recorded
Recognition
Accounting Equation
Stockholder's Equity =
Actuaries
20. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Balance Sheet
Contra Account
Mutual Agency
Accrued Expenses
21. Revenues - Expenses
Sole proprietorship
Net Income =
GAAP
Stockholder's Equity
22. As an expense and the corresponding liability accumulate.
Permanent Accounts (Real Accounts)
Liquidity
Accounting Equation
Accrued Expenses
23. 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
Income Statement
Closing Entries
Accrual Accounting
Going Concern
24. Contributed Capital + Retained Earnings
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25. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Events that are recorded as transactions
Going Concern
GASB
Stockholder's Equity =
26. Lists all accounts and their balances
Adjusted Trial Balance
Allocating recorded costs between 2 or more accounting periods (ARC)
Accounting Equation
Normal Balance
27. It's usual balance and is the side (debit or credit) that increases the amount.
Actuaries
Contra Account
Net Income =
Normal Balance
28. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Periodicity
Steps for Income Summary Account
Long term assets are..
Securities Exchange Commission (SEC)
29. Deferral of an expense! (Except land)
Periodicity
Going Concern
Closing Entries
Long term assets are..
30. 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
IASB
Adjusting entries NEVER affect..
Income Summary Account
31. 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
IASB
Continuity Assumption
Income Summary Account
32. Working totals
Closing Entries
Matching Rule
Valuation
Footings
33. A 12 month accounting period (Vary depending on slack seasons)
Liquidity
Fiscal Year
Valuation Issue
'Big Bath Theory'
34. Decreases
Corporations
Accrued Expenses
Statement of Retained Earnings:
Dividends are what to SE
35. 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.
Accrued Expenses
Corporations
Income Statement
Recognizing unrecorded - earned revenues
36. People that estimate various things
Expenses are what to SE..
Actuaries
We Recognize A Transaction
Recognition
37. International Accounting Standards Board.
IASB
Accrued Expenses
Footings
Accrual Accounting
38. Accounting Equation
Accounting Equation
Recognition
Dividends are what to SE
Liquidity
39. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Matching Rule
Permanent Accounts (Real Accounts)
Actuaries
40. 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
Adjusted Trial Balance
IASB
Accrual Accounting
Board of Directors
41. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Statement of Retained Earnings:
We Recognize A Transaction
Accumulated Depreciation Accounts
Recognizing Unrecorded Expenses (RUE)
42. The predetermined time at which a transaction should be recorded.
Accrued Expenses
Mutual Agency
Recognition Point
Allocating recorded costs between 2 or more accounting periods (ARC)
43. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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44. Contains only balance sheet accounts.
Recognition
Deferral
Final Trial Balance
Carrying Value
45. Separate legal entities - and the corporation can enter contracts and also be sued. Stockholder's cannot be sued.
Corporations
Post-closing trial balance
Income Summary Account
Accrual Accounting
46. The amount allocated to any one accounting period.
Depreciation
Operating Activities
GAAP
Cost Principle
47. Postponement of recognition of an expense already paid.
Steps for Income Summary Account
Deferral
Recognizing Unrecorded Expenses (RUE)
Post-closing trial balance
48. Match expenses with the revenues that they help generate - & vice versa.
GASB
Balance Sheet
Matching Rule
SEC Requirements for transactions
49. Shows the changes in RE over an accounting period.
Adjusting entries affect...
Revenues are what to SE..
Statement of Retained Earnings:
Stockholder's Equity
50. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Footings
Interim Periods
Earnings Management
Recognizing Unrecorded Expenses (RUE)