HFMA CHFP UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Asset
Answer: _____ is what you have or are owed.
●● Liability
Answer: _______ is what you owe.
●● Net assets or equity
Answer: ______ is what you get to keep.
●● Accounting equation
Answer: Assets = (Liabilities + Net Assets) [for a not-for-profit entity] or
Assets = (Liabilities + Equity) [for a for-profit entity). Sometimes also
referred to as the accounting identity.
●● The Matching Principle
Answer: Revenues earned in a given period (month, quarter, year) must
be matched with the corresponding expenses incurred in earning that
revenue.
, ●● Accrual
Answer: Is an accounting entry that records an asset (receivable) for a
service (revenue) rendered but for which payment has not been collected
and a liability (a payable) for a matching cost (expense) incurred but not
yet paid. ______ basis accounting (an accounting system that uses
accruals) is required by Generally Accepted Accounting Principles
(GAAP) of all but the smallest business entities.
●● Cash basis accounting
Answer: ___________ is the alternative to accrual basis accounting. It
does not follow the matching principle. Under cash basis accounting,
Revenue = Cash receipts and Expenses = Cash disbursements.
●● Income Statement or "Statement of Activities"
Answer: _______________ summarizes revenues, expenses, and income
for an organization over a specified period of time (month, quarter,
year). The _____ ties to the balance sheet through net assets: Net assets
at beginning of the period (the previous balance sheet date) + Net
income during the period = Net assets at the end of the period (the
current balance sheet date).
●● Balance Sheet or "Statement of Financial Position"
Answer: The _____ describes the organization's assets, liabilities, and
net assets at a specified point in time - usually the end of the accounting
period (month, quarter, year).
QUESTIONS AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Asset
Answer: _____ is what you have or are owed.
●● Liability
Answer: _______ is what you owe.
●● Net assets or equity
Answer: ______ is what you get to keep.
●● Accounting equation
Answer: Assets = (Liabilities + Net Assets) [for a not-for-profit entity] or
Assets = (Liabilities + Equity) [for a for-profit entity). Sometimes also
referred to as the accounting identity.
●● The Matching Principle
Answer: Revenues earned in a given period (month, quarter, year) must
be matched with the corresponding expenses incurred in earning that
revenue.
, ●● Accrual
Answer: Is an accounting entry that records an asset (receivable) for a
service (revenue) rendered but for which payment has not been collected
and a liability (a payable) for a matching cost (expense) incurred but not
yet paid. ______ basis accounting (an accounting system that uses
accruals) is required by Generally Accepted Accounting Principles
(GAAP) of all but the smallest business entities.
●● Cash basis accounting
Answer: ___________ is the alternative to accrual basis accounting. It
does not follow the matching principle. Under cash basis accounting,
Revenue = Cash receipts and Expenses = Cash disbursements.
●● Income Statement or "Statement of Activities"
Answer: _______________ summarizes revenues, expenses, and income
for an organization over a specified period of time (month, quarter,
year). The _____ ties to the balance sheet through net assets: Net assets
at beginning of the period (the previous balance sheet date) + Net
income during the period = Net assets at the end of the period (the
current balance sheet date).
●● Balance Sheet or "Statement of Financial Position"
Answer: The _____ describes the organization's assets, liabilities, and
net assets at a specified point in time - usually the end of the accounting
period (month, quarter, year).
