WGU C213 OA Study Guide | Actual Notes &
OA Actual Questions and Answers | Latest with
complete solutions
C213 notes
Chapter 1
Accounting
A system of providing "quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions."
American Institute of Certified Public Accountants (AICPA)
The professional organization of certified public accountants in the United States.
professional organization of certified public accountants (CPAs) in the United States. A
CPA is someone who has taken a minimum number of college-level accounting
classes, has passed the CPA exam, and has met other requirements set by his or her
state. A CPA firm is a company that provides freelance business advice, particularly in
connection with accounting issues.
• Certified Public Accountant: A person who has taken a minimum number of
college-level accounting classes, has passed the CPA exam, and has met other
requirements set by his or her state.
Balance Sheet
Document which reports the resources of a company (the assets), the company's
obligations (the liabilities), and the owners' equity, which represents how much money
has been invested in the company by its owners.
Bookkeeping
The preservation of a systematic, quantitative record of an activity.
Financial Accounting Standards Board (FASB)
Private, non-profit body that sets accounting standards in the United States.
Financial Statements
The three primary financial information documents: the balance sheet, income
statement, and statement of cash flows.
• Income Statement This document reports the amount of net income earned by a
company during a period, with annual and quarterly income statements being
the most common.
• Balance Sheet: A statement of financial position shows the financial resources
the company owns or controls and the claims on those resources
• Statement of Cash Flows: This document reports the amount of cash collected
,and paid out by a company in the following three types of activities: operating,
investing, and financing.
o Operating Activities: Those activities involved in producing and selling
goods and services and thus comprise the day-to-day business of a
company
o Investing Activities: The purchase and sale of land, buildings, and
equipment. Investing activities also include buying and selling stocks of
other companies
, o Financing Activities: Those activities whereby cash is obtained from, or
repaid to, owners and creditors
Internal Revenue Service (IRS)
The government agency responsible for tax collection and tax law enforcement.
International Accounting Standards Board (IASB)
An independent, international body formed to develop worldwide accounting
standards.
International Financial Reporting Standards (IFRS)
• The accounting standards produced by the IASB.
Managerial Accounting
• The name given to accounting systems designed for internal users.
Financial Accounting
• name given to accounting information provided for and used by external users.
Securities and Exchange Commission (SEC)
• The government body responsible for regulating the financial reporting practices
of most publicly owned corporations in connection with the buying and selling of
stocks and bonds.
• Public Company Accounting Oversight Board (PCAOB) A private, non-profit
organization that effectively serves as an arm of the SEC in registering,
inspecting, and disciplining the auditors of all publicly traded companies.
3 factors that make significant change in accounting. rapid advance in information
technology, the international integration of worldwide business, and the increased
scrutiny associated with the large corporate accounting scandals.
• A wave of accounting scandals starting in 2001 resulted in the Sarbanes-Oxley
Act, which increases U.S. federal government scrutiny of the production of
financial statements.
Chapter 2
Accounting
Assets = Liabilities + Owners' Equity or a-(l+o)
Accumulated Other Comprehensive Income
The source of these increased assets, these items reflect increases and decreases in
equity because of the movement of market prices or exchange rates
Assets
Assets 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
, A statement of financial position shows the financial resources the company owns or
controls and the claims on those resources
Book Value
book value of an asset is the asset's cost minus the asset's accumulated depreciation.
Comparability
Information that becomes much more useful when it can be related to a benchmark or
standard
Conservatism
a pervasive factor in accounting, can be summarized as follows: When in doubt,
recognize all losses but don't recognize any gains. Information related to recognizing
losses as they occur
Consistency
The consistency principle states that, once you adopt an accounting principle or
method, continue to follow it consistently in future accounting periods.
Earnings Per Share (EPS)
is the amount of net income associated with each share of stock.
Entity Concept
The idea that personal financial activity is kept separate from business financial activity
Expenses
The amount of assets consumed from the performance of business operations and thus
are the opposite of revenues
External Audit
• audit conducted by external (independent) qualified accountant(s)
Financing Activities
• activities whereby cash is obtained from, or repaid to, owners and creditors
Gains
• Refers to money made on activities outside the normal business of a company
Going Concern Assumption
allows the readers of financial statements to assume that the company will continue on
long enough to carry out its objectives and commitments.
Historical Cost Convention
An accounting technique that values an asset for balance sheet purposes at the price
paid for the asset at the time of its acquisition
Income Statement
• A company's financial performance for a specified period of time.
OA Actual Questions and Answers | Latest with
complete solutions
C213 notes
Chapter 1
Accounting
A system of providing "quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions."
American Institute of Certified Public Accountants (AICPA)
The professional organization of certified public accountants in the United States.
professional organization of certified public accountants (CPAs) in the United States. A
CPA is someone who has taken a minimum number of college-level accounting
classes, has passed the CPA exam, and has met other requirements set by his or her
state. A CPA firm is a company that provides freelance business advice, particularly in
connection with accounting issues.
• Certified Public Accountant: A person who has taken a minimum number of
college-level accounting classes, has passed the CPA exam, and has met other
requirements set by his or her state.
Balance Sheet
Document which reports the resources of a company (the assets), the company's
obligations (the liabilities), and the owners' equity, which represents how much money
has been invested in the company by its owners.
Bookkeeping
The preservation of a systematic, quantitative record of an activity.
Financial Accounting Standards Board (FASB)
Private, non-profit body that sets accounting standards in the United States.
Financial Statements
The three primary financial information documents: the balance sheet, income
statement, and statement of cash flows.
• Income Statement This document reports the amount of net income earned by a
company during a period, with annual and quarterly income statements being
the most common.
• Balance Sheet: A statement of financial position shows the financial resources
the company owns or controls and the claims on those resources
• Statement of Cash Flows: This document reports the amount of cash collected
,and paid out by a company in the following three types of activities: operating,
investing, and financing.
o Operating Activities: Those activities involved in producing and selling
goods and services and thus comprise the day-to-day business of a
company
o Investing Activities: The purchase and sale of land, buildings, and
equipment. Investing activities also include buying and selling stocks of
other companies
, o Financing Activities: Those activities whereby cash is obtained from, or
repaid to, owners and creditors
Internal Revenue Service (IRS)
The government agency responsible for tax collection and tax law enforcement.
International Accounting Standards Board (IASB)
An independent, international body formed to develop worldwide accounting
standards.
International Financial Reporting Standards (IFRS)
• The accounting standards produced by the IASB.
Managerial Accounting
• The name given to accounting systems designed for internal users.
Financial Accounting
• name given to accounting information provided for and used by external users.
Securities and Exchange Commission (SEC)
• The government body responsible for regulating the financial reporting practices
of most publicly owned corporations in connection with the buying and selling of
stocks and bonds.
• Public Company Accounting Oversight Board (PCAOB) A private, non-profit
organization that effectively serves as an arm of the SEC in registering,
inspecting, and disciplining the auditors of all publicly traded companies.
3 factors that make significant change in accounting. rapid advance in information
technology, the international integration of worldwide business, and the increased
scrutiny associated with the large corporate accounting scandals.
• A wave of accounting scandals starting in 2001 resulted in the Sarbanes-Oxley
Act, which increases U.S. federal government scrutiny of the production of
financial statements.
Chapter 2
Accounting
Assets = Liabilities + Owners' Equity or a-(l+o)
Accumulated Other Comprehensive Income
The source of these increased assets, these items reflect increases and decreases in
equity because of the movement of market prices or exchange rates
Assets
Assets 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
, A statement of financial position shows the financial resources the company owns or
controls and the claims on those resources
Book Value
book value of an asset is the asset's cost minus the asset's accumulated depreciation.
Comparability
Information that becomes much more useful when it can be related to a benchmark or
standard
Conservatism
a pervasive factor in accounting, can be summarized as follows: When in doubt,
recognize all losses but don't recognize any gains. Information related to recognizing
losses as they occur
Consistency
The consistency principle states that, once you adopt an accounting principle or
method, continue to follow it consistently in future accounting periods.
Earnings Per Share (EPS)
is the amount of net income associated with each share of stock.
Entity Concept
The idea that personal financial activity is kept separate from business financial activity
Expenses
The amount of assets consumed from the performance of business operations and thus
are the opposite of revenues
External Audit
• audit conducted by external (independent) qualified accountant(s)
Financing Activities
• activities whereby cash is obtained from, or repaid to, owners and creditors
Gains
• Refers to money made on activities outside the normal business of a company
Going Concern Assumption
allows the readers of financial statements to assume that the company will continue on
long enough to carry out its objectives and commitments.
Historical Cost Convention
An accounting technique that values an asset for balance sheet purposes at the price
paid for the asset at the time of its acquisition
Income Statement
• A company's financial performance for a specified period of time.
