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