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