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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.
Matching Rule
Revenues are what to SE..
Long term assets are..
Corporations
2. Accounting Equation
When expenses exceed revenues..
Board of Directors
Continuity Assumption
Accounting Equation
3. Sole worker of your business
Fiscal Year
Final Trial Balance
Sole proprietorship
Long term assets are..
4. A separate account that is paired with a related account
Contra Account
Going Concern
Depreciation
Footings
5. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
Board of Directors
Accounting Equation
We Recognize A Transaction
Allocating recorded costs between 2 or more accounting periods (ARC)
6. Increases
Board of Directors
Revenues are what to SE..
SEC Requirements for transactions
'Big Bath Theory'
7. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Expenses are what to SE..
Carrying Value
Final Trial Balance
Permanent Accounts (Real Accounts)
8. Decreases
Not recorded as transactions
Expenses are what to SE..
Accrued Expenses
Securities Exchange Commission (SEC)
9. 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 affect...
Adjusted Trial Balance
Long term assets are..
Cash Basis of Accounting
10. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Steps for Income Summary Account
Recognizing Unrecorded Expenses (RUE)
Statement of Retained Earnings:
Securities Exchange Commission (SEC)
11. 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
Accrual Accounting
Adjusted Trial Balance
Interim Periods
Closing Entries
12. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
Allocating recorded costs between 2 or more accounting periods (ARC)
Expenses are what to SE..
Valuation
Stockholder's Equity
13. The estimation of business's net income in terms of accounting periods.
Recognizing Unrecorded Expenses (RUE)
Contra Account
Periodicity
Earnings Management
14. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Post-closing trial balance
Expenses are what to SE..
Not recorded as transactions
Balance Sheet
15. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Adjusted Trial Balance
Valuation Issue
Final Trial Balance
16. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Final Trial Balance
Sole proprietorship
SEC Requirements for transactions
Not recorded as transactions
17. Selling goods and services to customers - employing managers and workers.
Normal Balance
Operating Activities
Stockholder's Equity =
Accumulated Depreciation accounts are deducted from..
18. Working totals
Footings
Liquidity
Earnings Management
Income Statement
19. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
'Big Bath Theory'
Post-closing trial balance
GASB
Net Income =
20. At a specific point in time (Certain Date)....Assets - Liabilities - Stockholder's equity.
Dividends are what to SE
Not recorded as transactions
Balance Sheet
Adjusting entries affect...
21. 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)
Valuation Issue
Statement of Retained Earnings:
Interim Periods
22. A 12 month accounting period (Vary depending on slack seasons)
Sole proprietorship
FASB
Valuation Issue
Fiscal Year
23. Postponement of recognition of an expense already paid.
Closing Entries
Adjusted Trial Balance
Footings
Deferral
24. The net amount - or 'Book Value' of an asset
Carrying Value
Going Concern
Valuation Issue
Dividends are what to SE
25. If you're having a bad year - to dump everything into something else like pensions
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26. Customer buys a service - company pays an employee for service - company performs service
Normal Balance
Valuation Issue
Events that are recorded as transactions
Sole proprietorship
27. Decreases
Continuity Assumption
Periodicity
Dividends are what to SE
When expenses exceed revenues..
28. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Liquidity
GAAP
Steps for Income Summary Account
Income Summary Account
29. Shows the changes in RE over an accounting period.
Contra Account
Interim Periods
Statement of Retained Earnings:
Events that are recorded as transactions
30. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Final Trial Balance
Carrying Value
FASB
Post-closing trial balance
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
FASB
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Sole proprietorship
32. As an expense and the corresponding liability accumulate.
Cash Basis of Accounting
Consignment Sale
Accrual Accounting
Accrued Expenses
33. Contains only balance sheet accounts.
Final Trial Balance
Stockholder's Equity =
Normal Balance
Adjusting entries affect...
34. Used to accumulate the depreciation on each long-term asset
Liquidity
Net Income =
Accumulated Depreciation Accounts
Cash Basis of Accounting
35. Revenues that a company has earned but for which no entry has been made in the accounting records
IASB
Accrued revenues
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Recognizing unrecorded - earned revenues
36. International Accounting Standards Board.
IASB
GAAP
Accumulated Depreciation accounts are deducted from..
Adjusting entries affect...
37. A temporary account that summarizes all revenues and expenses for the period.
Income Summary Account
Revenues are what to SE..
Events that are recorded as transactions
Accrued Expenses
38. The manipulation of revenues and expenses to achieve a specific outcome.
Net Income =
Earnings Management
Depreciation
Sole proprietorship
39. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Contra Account
Actuaries
Board of Directors
40. Cash account
Adjusting entries NEVER affect..
Post-closing trial balance
Accrued revenues
Going Concern
41. Choosing the number of accounting periods
Consignment Sale
IASB
Adjusting entries NEVER affect..
Continuity
42. Contributed Capital + Retained Earnings
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43. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Accrued Expenses
Going Concern
Statement of Retained Earnings:
Income Statement
44. Their related asset accounts on the balance sheet
Recognizing unrecorded - earned revenues
Accumulated Depreciation accounts are deducted from..
Actuaries
Corporations
45. Deferral of an expense! (Except land)
Long term assets are..
Allocating recorded costs between 2 or more accounting periods (ARC)
GASB
When expenses exceed revenues..
46. The amount allocated to any one accounting period.
Depreciation
Sole proprietorship
Mutual Agency
Accumulated Depreciation Accounts
47. Lists all accounts and their balances
Adjusted Trial Balance
Valuation
Stockholder's Equity =
SEC Requirements for transactions
48. 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
Operating Activities
Periodicity
Accumulated Depreciation accounts are deducted from..
49. 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
Income Summary Account
Stockholder's Equity
Closing Entries
Carrying Value
50. The practice of recording transactions at exchange price at the point of recognition.
Accumulated Depreciation Accounts
Recognizing unrecorded - earned revenues
Continuity
Cost Principle