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Test your basic knowledge |
CLEP Financial Accounting
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Subjects
:
clep
,
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. When title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.
FASB
Fiscal Year
Consignment Sale
We Recognize A Transaction
2. Contains only balance sheet accounts.
Dividends are what to SE
Matching Rule
Revenues are what to SE..
Final Trial Balance
3. 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
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Cash Basis of Accounting
Going Concern
4. The manipulation of revenues and expenses to achieve a specific outcome.
Valuation
Cash Basis of Accounting
Earnings Management
Adjusted Trial Balance
5. Working totals
Adjusting entries NEVER affect..
Final Trial Balance
Liquidity
Footings
6. Persuasive evidence of arrangement - Seller's price is fixed or determinable - Product or service has been delivered - Collectibility is reasonably assured
Cost Principle
When expenses exceed revenues..
'Big Bath Theory'
SEC Requirements for transactions
7. If you're having a bad year - to dump everything into something else like pensions
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8. Revenues - Expenses
FASB
Net Income =
IASB
Final Trial Balance
9. Accounting Equation
Deferral
Not recorded as transactions
Earnings Management
Accounting Equation
10. Financial Accounting Standards Board - Designed by SEC to develop rules on accounting practice.
FASB
Accrued revenues
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
Consignment Sale
11. Close the revenues account - Close the expense account - Close the income summary account - Close the dividends account
Steps for Income Summary Account
Continuity
'Big Bath Theory'
Cost Principle
12. Revenues that a company has earned but for which no entry has been made in the accounting records
Accrued revenues
Deferral
Liquidity
Carrying Value
13. The amount allocated to any one accounting period.
Depreciation
Balance Sheet
Not recorded as transactions
Stockholder's Equity =
14. Determines that all temporary accounts have zero balances and to double check that total debits = total credits
Post-closing trial balance
Interim Periods
'Big Bath Theory'
Accounting Equation
15. Net income on the income statement - and profitability comparisons from one accounting period to the next.
Adjusting entries affect...
Continuity Assumption
Periodicity
Carrying Value
16. 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
Closing Entries
Interim Periods
Recognition Point
17. Choosing the number of accounting periods
Cash Basis of Accounting
Actuaries
Adjusting entries NEVER affect..
Continuity
18. 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.
Events that are recorded as transactions
Recognizing unrecorded - earned revenues
Stockholder's Equity =
Contra Account
19. Determines corporate policy - declares dividends and appoints management.
Board of Directors
Events that are recorded as transactions
Balance Sheet
Interim Periods
20. A separate account that is paired with a related account
Earnings Management
Contra Account
Matching Rule
Periodicity
21. Companies present annual financial statements on the assumption that the business will continue to operate indefinitely
Adjusting entries NEVER affect..
We Recognize A Transaction
Contra Account
Going Concern
22. Cash account
Adjusting entries NEVER affect..
Income Summary Account
Dividends are what to SE
Actuaries
23. Payments received in advance - and deposits made on goods and services
Accumulated Depreciation Accounts
Valuation Issue
Allocating recorded - unearned revenues between 2 or more accounting periods (ARUR)
SEC Requirements for transactions
24. The ability to have enough cash to pay debts when they are due.
Adjusted Trial Balance
Accrual Accounting
Liquidity
Accumulated Depreciation Accounts
25. Balance sheet accounts - such as cash and accounts payable because they carry their end-of-period balances into the next accounting period
Matching Rule
Permanent Accounts (Real Accounts)
Recognition
Valuation
26. 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
Securities Exchange Commission (SEC)
SEC Requirements for transactions
Actuaries
Income Statement
27. A 12 month accounting period (Vary depending on slack seasons)
Accrual Accounting
FASB
Statement of Retained Earnings:
Fiscal Year
28. International Accounting Standards Board.
Recognition Point
Recognizing unrecorded - earned revenues
IASB
FASB
29. The estimation of business's net income in terms of accounting periods.
Valuation
Accrual Accounting
Continuity
Periodicity
30. Contributed Capital + Retained Earnings
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31. The difficulty of deciding when a business transaction should be recorded
Expenses are what to SE..
Consignment Sale
Recognition
Liquidity
32. Lists all accounts and their balances
SEC Requirements for transactions
Adjusted Trial Balance
Accrued revenues
Consignment Sale
33. 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)
FASB
Consignment Sale
Adjusting entries NEVER affect..
Long term assets are..
34. A temporary account that summarizes all revenues and expenses for the period.
Consignment Sale
Recognition Point
Income Summary Account
FASB
35. Common Stock + Retained Earnings - Dividends + Revenues - Expenses
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36. Selling goods and services to customers - employing managers and workers.
Recognition
Final Trial Balance
Operating Activities
Securities Exchange Commission (SEC)
37. customer inquires about availability of service -company hires new employee -company signs contract to provide service in future
GASB
Permanent Accounts (Real Accounts)
Not recorded as transactions
Closing Entries
38. Increases
Revenues are what to SE..
Statement of Retained Earnings:
When expenses exceed revenues..
Post-closing trial balance
39. Postponement of recognition of an expense already paid.
Normal Balance
Deferral
GASB
Recognition
40. A body of people set up by Congress who protect the public by regulating the issuing - buying - and selling of stocks in the US.
Adjusted Trial Balance
Periodicity
Securities Exchange Commission (SEC)
Steps for Income Summary Account
41. Decreases
Dividends are what to SE
Cash Basis of Accounting
Deferral
Mutual Agency
42. Unless there is evidence to the contrary - the accountant assumed that the business will continue to operate indefinitely
GAAP
Continuity Assumption
Footings
Stockholder's Equity =
43. Decreases
Expenses are what to SE..
Final Trial Balance
Adjusted Trial Balance
Earnings Management
44. Society recognizes you as a partner of your partnership - so if you or they do something stupid - you are bound to that deal.
Cash Basis of Accounting
Mutual Agency
Statement of Retained Earnings:
Income Statement
45. 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.
Footings
Cash Basis of Accounting
Normal Balance
Steps for Income Summary Account
46. Focuses on assigning a monetary value to a business transaction and accounting for assets and liabilities.
Net Income =
Valuation Issue
Adjusting entries NEVER affect..
GASB
47. The predetermined time at which a transaction should be recorded.
Recognition Point
Accumulated Depreciation accounts are deducted from..
Operating Activities
Steps for Income Summary Account
48. Generally Accepted Accounting Principles - or guidelines for financial accounting.
Adjusting entries NEVER affect..
Income Statement
Sole proprietorship
GAAP
49. The net amount - or 'Book Value' of an asset
Carrying Value
Fiscal Year
Valuation
Normal Balance
50. Customer buys a service - company pays an employee for service - company performs service
Closing Entries
Adjusting entries affect...
Events that are recorded as transactions
Depreciation
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