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