WGU-C213-CHAPTER TWO EXAM QUIZZES
WITH VALIDATED SOLUTIONS | LATEST
UPDATE
Accounting Equation - Correct Answer -Assets = Liabilities + Owners' Equity
Accumulated Other Comprehensive Income - Correct Answer -The source of
these increased assets
Assets - Correct Answer -Are the firm's economic resources, formally defined
as "probable future economic benefits obtained or controlled by a particular
entity as a result of past transactions or events
Balance Sheet - Correct Answer -A statement of financial position shows the
financial resources the company owns or controls and the claims on those
resources
Book Value - Correct Answer -Is the value of an asset- which is the asset's cost
minus the asset's accumulated depreciation.
Comparability - Correct Answer -Information that becomes much more useful
when it can be related to a benchmark or standard
Conservatism - Correct Answer -a pervasive factor in accounting, can be
summarized as follows: When in doubt, recognize all losses but don't recognize
any gains.
Consistency - Correct Answer -This principle states that, once you adopt an
accounting principle or method, continue to follow it consistently in future
accounting periods.
1
, Disclosure - Correct Answer -states that you should include in an entity's
financial statements all information that would affect a reader's understanding of
those statements. The interpretation of this principle is highly judgmental, since
the amount of information that can be provided is potentially massive. It is
customary to only disclose information about events that are likely to have a
material impact on the entity's financial position or financial results.
Earnings Per Share (EPS) - Correct Answer -tells the owner of a share of stock
how much monetary value is associated with each stock share
Entity Concept - Correct Answer -The idea that personal financial activity is
kept separate from business financial activity
Expenses - Correct Answer -The amount of assets consumed from the
performance of business operations and thus are the opposite of revenues
External Audit - Correct Answer -Is an audit conducted by outside
(independent) qualified accountant(s)
Financing Activities - Correct Answer -Are activities whereby cash is obtained
from, or repaid to, owners and creditors
Gains - Correct Answer -Refers to money made on activities outside the normal
business of a company
Going Concern Assumption - Correct Answer -Allows the readers of financial
statements to assume that the company will continue on long enough to carry
out its objectives and commitments.
2
WITH VALIDATED SOLUTIONS | LATEST
UPDATE
Accounting Equation - Correct Answer -Assets = Liabilities + Owners' Equity
Accumulated Other Comprehensive Income - Correct Answer -The source of
these increased assets
Assets - Correct Answer -Are the firm's economic resources, formally defined
as "probable future economic benefits obtained or controlled by a particular
entity as a result of past transactions or events
Balance Sheet - Correct Answer -A statement of financial position shows the
financial resources the company owns or controls and the claims on those
resources
Book Value - Correct Answer -Is the value of an asset- which is the asset's cost
minus the asset's accumulated depreciation.
Comparability - Correct Answer -Information that becomes much more useful
when it can be related to a benchmark or standard
Conservatism - Correct Answer -a pervasive factor in accounting, can be
summarized as follows: When in doubt, recognize all losses but don't recognize
any gains.
Consistency - Correct Answer -This principle states that, once you adopt an
accounting principle or method, continue to follow it consistently in future
accounting periods.
1
, Disclosure - Correct Answer -states that you should include in an entity's
financial statements all information that would affect a reader's understanding of
those statements. The interpretation of this principle is highly judgmental, since
the amount of information that can be provided is potentially massive. It is
customary to only disclose information about events that are likely to have a
material impact on the entity's financial position or financial results.
Earnings Per Share (EPS) - Correct Answer -tells the owner of a share of stock
how much monetary value is associated with each stock share
Entity Concept - Correct Answer -The idea that personal financial activity is
kept separate from business financial activity
Expenses - Correct Answer -The amount of assets consumed from the
performance of business operations and thus are the opposite of revenues
External Audit - Correct Answer -Is an audit conducted by outside
(independent) qualified accountant(s)
Financing Activities - Correct Answer -Are activities whereby cash is obtained
from, or repaid to, owners and creditors
Gains - Correct Answer -Refers to money made on activities outside the normal
business of a company
Going Concern Assumption - Correct Answer -Allows the readers of financial
statements to assume that the company will continue on long enough to carry
out its objectives and commitments.
2
