Wgu Mba Program C213 Accounting Questions And Answers
Accounting - ANS-Recording of day-to-day financial activities of a company and the
organization of that information into summary reports used to evaluate the companies
financial status.
Three primary financial statements in financial accounting - ANS-1) The Balance Sheet
2) The Income Statement
3) The Statement of Cash Flows
Balance Sheet - ANS-A financial statement that reports assets, liabilities, and owner's
equity on a specific date.
Income Statement - ANS-A financial statement showing the revenue and expenses for a
fiscal period. A company's expenses are subtracted from its revenues in computing net
income.
Statement of Cash Flows - ANS-the amount of cash collected and paid out by a
company in the following three types of activities, operating, investing, and financing.
Financial Accounting Users - ANS-Lenders, investors, company management,
suppliers, customers, employees, competitors, government agencies, politicians and the
press.
FASB (Financial Accounting Standards Board) - ANS-A private body that sets the
accounting standards in the United States.
SEC Securities and Exchange Commission - ANS-Regulates US stock exchanges
AICPA (American Institute of Certified Public Accountants) - ANS-Professional
organization of certified public accountants in the US.
Three factors that make right now a time of significant change in accounting are: - ANS-
1) Globalization of Accounting Standards
2) Information Technology
3) Accounting scandals including the 2001 Sarbanes-Oxley Act.
Financial Statements - ANS-Increase the amount of financial information about a
company to attract investors, lenders and other parties interested in the companies
financial status.
The Balance Sheet - ANS-A report that shows the company's financial position at a
specified point in time and lists the company's resources (assets), obligations
(liabilities), and net ownership interest (owner's equity).
, Notes to the Financial Statement - ANS-Provide information on the accounting
assumptions used in preparing the statements and also provide supplemental
information not included in the statements themselves.
An audit performed by accountants from outside a company that increases the reliance
that users can place on the information in the companies financial statements - ANS-
External Audit Report
Relevant - ANS-Information that is provided on a timely basis that can be used to
assess the past and project the future.
Reliable - ANS-Information that represents exactly what it is supposed to represent.
Comparability - ANS-Ability to compare the accounting information of different
companies because they use the same accounting principles.
Conservatism - ANS-The practice of recognizing all losses but not recognizing gains
until they are certain.
Materiality - ANS-The concept that weighs whether or not a certain dollar amount is
large enough to make a difference to anyone.
current assets - ANS-cash and other assets expected to be exchanged for cash or
consumed within a year
What are the most common current assets? - ANS-cash, accounts receivable, inventory
long term assets - ANS-assets that are expected to be used in business operations for
longer than one year.
What are the most common long term assets? - ANS-Property, plant and equipment
intagible assets - ANS-companies report the intangibles that they have purchased from
other companies but not the intangibles that they have developed themselves
The first item in a U.S. balance sheet is - ANS-usually cash; companies located in non-
U.S. countries often list long-term assets first.
Companies usually provide balance sheets - ANS-For at least two years, with the
statements shown in comparative, side-by-side format
regognition - ANS-Recognition is the process of condensing all estimates and
judgments into one number and reporting that one number in the formal financial
statements
What is the accounting equation? - ANS-Assets = Liabilities + Owner's Equity
Accounting - ANS-Recording of day-to-day financial activities of a company and the
organization of that information into summary reports used to evaluate the companies
financial status.
Three primary financial statements in financial accounting - ANS-1) The Balance Sheet
2) The Income Statement
3) The Statement of Cash Flows
Balance Sheet - ANS-A financial statement that reports assets, liabilities, and owner's
equity on a specific date.
Income Statement - ANS-A financial statement showing the revenue and expenses for a
fiscal period. A company's expenses are subtracted from its revenues in computing net
income.
Statement of Cash Flows - ANS-the amount of cash collected and paid out by a
company in the following three types of activities, operating, investing, and financing.
Financial Accounting Users - ANS-Lenders, investors, company management,
suppliers, customers, employees, competitors, government agencies, politicians and the
press.
FASB (Financial Accounting Standards Board) - ANS-A private body that sets the
accounting standards in the United States.
SEC Securities and Exchange Commission - ANS-Regulates US stock exchanges
AICPA (American Institute of Certified Public Accountants) - ANS-Professional
organization of certified public accountants in the US.
Three factors that make right now a time of significant change in accounting are: - ANS-
1) Globalization of Accounting Standards
2) Information Technology
3) Accounting scandals including the 2001 Sarbanes-Oxley Act.
Financial Statements - ANS-Increase the amount of financial information about a
company to attract investors, lenders and other parties interested in the companies
financial status.
The Balance Sheet - ANS-A report that shows the company's financial position at a
specified point in time and lists the company's resources (assets), obligations
(liabilities), and net ownership interest (owner's equity).
, Notes to the Financial Statement - ANS-Provide information on the accounting
assumptions used in preparing the statements and also provide supplemental
information not included in the statements themselves.
An audit performed by accountants from outside a company that increases the reliance
that users can place on the information in the companies financial statements - ANS-
External Audit Report
Relevant - ANS-Information that is provided on a timely basis that can be used to
assess the past and project the future.
Reliable - ANS-Information that represents exactly what it is supposed to represent.
Comparability - ANS-Ability to compare the accounting information of different
companies because they use the same accounting principles.
Conservatism - ANS-The practice of recognizing all losses but not recognizing gains
until they are certain.
Materiality - ANS-The concept that weighs whether or not a certain dollar amount is
large enough to make a difference to anyone.
current assets - ANS-cash and other assets expected to be exchanged for cash or
consumed within a year
What are the most common current assets? - ANS-cash, accounts receivable, inventory
long term assets - ANS-assets that are expected to be used in business operations for
longer than one year.
What are the most common long term assets? - ANS-Property, plant and equipment
intagible assets - ANS-companies report the intangibles that they have purchased from
other companies but not the intangibles that they have developed themselves
The first item in a U.S. balance sheet is - ANS-usually cash; companies located in non-
U.S. countries often list long-term assets first.
Companies usually provide balance sheets - ANS-For at least two years, with the
statements shown in comparative, side-by-side format
regognition - ANS-Recognition is the process of condensing all estimates and
judgments into one number and reporting that one number in the formal financial
statements
What is the accounting equation? - ANS-Assets = Liabilities + Owner's Equity
