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