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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. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
Not recorded as transactions
Closing Entries
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Carrying Value
2. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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3. Cash account
Adjusting entries NEVER affect..
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Cost Principle
Carrying Value
4. A 12 month accounting period (Vary depending on slack seasons)
Fiscal Year
Closing Entries
Normal Balance
Adjusted Trial Balance
5. Wages - Interest - and Income taxes that have been incurred but have not been recorded during an accounting period.
Recognizing Unrecorded Expenses (RUE)
Permanent Accounts (Real Accounts)
Deferral
Footings
6. Payments received in advance - and deposits made on goods and services
Net Income =
Accumulated Depreciation accounts are deducted from..
Accrued revenues
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
7. Used to accumulate the depreciation on each long-term asset
Adjusting entries NEVER affect..
Recognition Point
Accumulated Depreciation Accounts
Cash Basis of Accounting
8. Accounting periods of less than a year.
Interim Periods
Allocating recorded costs between 2 or more accounting periods (ARC)
We Recognize A Transaction
Sole proprietorship
9. Lists all accounts and their balances
Statement of Retained Earnings:
Recognition
Adjusted Trial Balance
Post-closing trial balance
10. Shows the changes in RE over an accounting period.
Cost Principle
Permanent Accounts (Real Accounts)
Statement of Retained Earnings:
Accrued revenues
11. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
SEC Requirements for transactions
We Recognize A Transaction
Matching Rule
Carrying Value
12. Accounting Equation
Periodicity
Valuation Issue
Earnings Management
Accounting Equation
13. Selling goods and services to customers - employing managers and workers.
Operating Activities
Matching Rule
Consignment Sale
Footings
14. 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
Steps for Income Summary Account
Adjusted Trial Balance
SEC Requirements for transactions
15. Revenues that a company has earned but for which no entry has been made in the accounting records
Not recorded as transactions
Accrued revenues
Normal Balance
Corporations
16. Sole worker of your business
Board of Directors
Sole proprietorship
Accrued Expenses
'Big Bath Theory'
17. Postponement of recognition of an expense already paid.
Accrued revenues
Recognition
Deferral
Allocating recorded costs between 2 or more accounting periods (ARC)
18. The net amount - or 'Book Value' of an asset
Statement of Retained Earnings:
Valuation
Contra Account
Carrying Value
19. Decreases
Continuity
Expenses are what to SE..
Adjusting entries NEVER affect..
Accumulated Depreciation accounts are deducted from..
20. A net loss occurs
Balance Sheet
Accounting Equation
Accrual Accounting
When expenses exceed revenues..
21. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
Continuity Assumption
Consignment Sale
Accumulated Depreciation Accounts
Normal Balance
22. Their related asset accounts on the balance sheet
Accumulated Depreciation accounts are deducted from..
Board of Directors
Not recorded as transactions
Post-closing trial balance
23. 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
Accrued Expenses
Deferral
Depreciation
24. The difficulty of deciding when a business transaction should be recorded
Events that are recorded as transactions
Recognition Point
Carrying Value
Recognition
25. Government Accounting Standards Board - similar to FASB - issues accounting standards for state and local governments.
GASB
Liquidity
Statement of Retained Earnings:
Recognizing unrecorded - earned revenues
26. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Recognition
Securities Exchange Commission (SEC)
SEC Requirements for transactions
Adjusting entries NEVER affect..
27. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Income Statement
Going Concern
Normal Balance
Interim Periods
28. Match expenses with the revenues that they help generate - & vice versa.
Carrying Value
Normal Balance
Balance Sheet
Matching Rule
29. Contains only balance sheet accounts.
Accounting Equation
Recognizing unrecorded - earned revenues
Final Trial Balance
We Recognize A Transaction
30. The estimation of business's net income in terms of accounting periods.
Continuity Assumption
Accrued revenues
Periodicity
Normal Balance
31. 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
Normal Balance
Mutual Agency
Balance Sheet
32. Payments of rent - insurance - supplies - and the depreciation of plant and equipment
Normal Balance
Fiscal Year
Allocating recorded costs between 2 or more accounting periods (ARC)
Board of Directors
33. Customer buys a service - company pays an employee for service - company performs service
Events that are recorded as transactions
Normal Balance
Actuaries
Deferral
34. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Final Trial Balance
Balance Sheet
Securities Exchange Commission (SEC)
Board of Directors
35. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
Permanent Accounts (Real Accounts)
We Recognize A Transaction
FASB
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
36. The manipulation of revenues and expenses to achieve a specific outcome.
We Recognize A Transaction
FASB
Depreciation
Earnings Management
37. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
GAAP
Post-closing trial balance
Steps for Income Summary Account
Final Trial Balance
38. 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.
Recognition
Dividends are what to SE
Cash Basis of Accounting
Adjusting entries NEVER affect..
39. People that estimate various things
Fiscal Year
Actuaries
Balance Sheet
Interim Periods
40. A temporary account that summarizes all revenues and expenses for the period.
Accounting Equation
Events that are recorded as transactions
Income Summary Account
Closing Entries
41. Forces a monetary value to a business transaction and accounting for the assets and liabilities that result from the transaction.
GAAP
Consignment Sale
Valuation
Recognizing Unrecorded Expenses (RUE)
42. If you're having a bad year - to dump everything into something else like pensions
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43. The predetermined time at which a transaction should be recorded.
Actuaries
Recognition Point
Accrued Expenses
When expenses exceed revenues..
44. Contributed Capital + Retained Earnings
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45. The amount allocated to any one accounting period.
Accrued revenues
Depreciation
Cost Principle
Accrued Expenses
46. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Final Trial Balance
Normal Balance
Adjusting entries affect...
Income Summary Account
47. Deferral of an expense! (Except land)
Income Summary Account
Liquidity
Corporations
Long term assets are..
48. It's usual balance and is the side (debit or credit) that increases the amount.
Net Income =
Normal Balance
We Recognize A Transaction
Corporations
49. As an expense and the corresponding liability accumulate.
Accrued Expenses
Permanent Accounts (Real Accounts)
Mutual Agency
Continuity
50. International Accounting Standards Board.
IASB
Allocating recorded costs between 2 or more accounting periods (ARC)
When expenses exceed revenues..
Fiscal Year