C213 Accounting for Decision Makers
WGU as of April 2018
Describe the purpose of accounting. - CORRECT ANSWER-Accounting is the
recording of day-to-day financial activities and the organization of information into
a summary of reports that evaluate the company's financial status.
Which financial statements are used in financial accounting? - CORRECT
ANSWER-1. Balance Sheet
2. Income Statement
3. Statement of Cash Flows
Who are the "users" of financial statements? - CORRECT ANSWER-Lenders,
Investors, Management, Suppliers, Customers, Employees, Competitors,
Government Agencies, and the Press.
Identify US accounting rules and standards board. - CORRECT
ANSWER-FASB=Financial Accounting Standards Board
7 key members
GAAP=Generally Accepted Accounting Principles
Not a government agency
Private group
Started in 1973
What are some of the accredited organizations? - CORRECT
ANSWER-SEC=Securities and Exchange Commission
AICPA=American Institute of CPA's
PCAOB=Public Company Acctg. Oversight Board
IRS=Internal Revenue Service
IASB=International Acctg. Standards Board
What are the current trends that are causing major changes in the field of
accounting? - CORRECT ANSWER-*Rapid advance in information Technology
*International integrations of worldwide businesses
*Increase scrutiny associated w/ large acctg. scandals.
, Identify the purpose of a financial statement - CORRECT ANSWER-1. Increasing
information available about a company, financial statements make it easier for a
company to attract investors, lenders, and other parties.
2. Financial statements make it easier to get better interest rates on loans.
3. Attracts investors on more favorable terms.
What are the components to a balance sheet? - CORRECT ANSWER-It reports
the company's financial position as any specific point in time, it includes:
* Resources (Assets)
* Obligations (Liabilities)
*Net Ownership Interest (owner's/stockholders equity)
What is the accounting equation to calculate total assets, total liabilities, and/or
total owners/stockholders equity? - CORRECT ANSWER-Assets = Liabilities +
Owners/Stockerholders Equity
What is the purpose of the income statement? - CORRECT ANSWER-To
describe the company's financial performance for a period of time.
What is the income statement formula? - CORRECT ANSWER-Revenue -
Expenses = Net Income
What is the purpose of the cash flow statement? - CORRECT ANSWER-Details
how the company obtained and spent cash during any given period of time. It is
described in the following terms:
* Operating
* Investing
* Financing
What is the purpose of financial statement notes? - CORRECT ANSWER-To
provide more information to the financial statement, including:
1. Summary of Accounting Principles
2. Additional Information about summary totals in the statements
3. Disclosure of Information not in the statements
4. Supplemental disclosure required by FASB and SEC.
WGU as of April 2018
Describe the purpose of accounting. - CORRECT ANSWER-Accounting is the
recording of day-to-day financial activities and the organization of information into
a summary of reports that evaluate the company's financial status.
Which financial statements are used in financial accounting? - CORRECT
ANSWER-1. Balance Sheet
2. Income Statement
3. Statement of Cash Flows
Who are the "users" of financial statements? - CORRECT ANSWER-Lenders,
Investors, Management, Suppliers, Customers, Employees, Competitors,
Government Agencies, and the Press.
Identify US accounting rules and standards board. - CORRECT
ANSWER-FASB=Financial Accounting Standards Board
7 key members
GAAP=Generally Accepted Accounting Principles
Not a government agency
Private group
Started in 1973
What are some of the accredited organizations? - CORRECT
ANSWER-SEC=Securities and Exchange Commission
AICPA=American Institute of CPA's
PCAOB=Public Company Acctg. Oversight Board
IRS=Internal Revenue Service
IASB=International Acctg. Standards Board
What are the current trends that are causing major changes in the field of
accounting? - CORRECT ANSWER-*Rapid advance in information Technology
*International integrations of worldwide businesses
*Increase scrutiny associated w/ large acctg. scandals.
, Identify the purpose of a financial statement - CORRECT ANSWER-1. Increasing
information available about a company, financial statements make it easier for a
company to attract investors, lenders, and other parties.
2. Financial statements make it easier to get better interest rates on loans.
3. Attracts investors on more favorable terms.
What are the components to a balance sheet? - CORRECT ANSWER-It reports
the company's financial position as any specific point in time, it includes:
* Resources (Assets)
* Obligations (Liabilities)
*Net Ownership Interest (owner's/stockholders equity)
What is the accounting equation to calculate total assets, total liabilities, and/or
total owners/stockholders equity? - CORRECT ANSWER-Assets = Liabilities +
Owners/Stockerholders Equity
What is the purpose of the income statement? - CORRECT ANSWER-To
describe the company's financial performance for a period of time.
What is the income statement formula? - CORRECT ANSWER-Revenue -
Expenses = Net Income
What is the purpose of the cash flow statement? - CORRECT ANSWER-Details
how the company obtained and spent cash during any given period of time. It is
described in the following terms:
* Operating
* Investing
* Financing
What is the purpose of financial statement notes? - CORRECT ANSWER-To
provide more information to the financial statement, including:
1. Summary of Accounting Principles
2. Additional Information about summary totals in the statements
3. Disclosure of Information not in the statements
4. Supplemental disclosure required by FASB and SEC.
