C213 Accounting for Decision Makers-2 WGU 2024 Questions and Answers 100% Pass

C213 Accounting for Decision Makers-2 WGU 2024 Questions and Answers 100% Pass Understanding of a business increases as one associates the individual asset, liability, and equity accounts with the underlying business activities that give rise to them. T/F - Answer- True Assets and liabilities are generally classified as _______________ or _________ __________. - Answer- current or long term. Current Asset - Answer- one that is expected to be used within one year of the balance sheet date. Long term assets include - Answer- property, plant and equipment, investments in other companies, and bonds or notes receivable Current Liabilities - Answer- liabilities due within a short time, usually within a year long-term debt - Answer- a liability that falls due beyond one year from the date of the financial statements Companies can issue what two kinds of stock? - Answer- common and preferred Common stockholders are the true owners of a business. T/F - Answer- True Preferred stockholders give up some of the rights of ownership enjoyed by common stockholders in exchange for some of the safety promised to creditors. T/F - Answer- True Companies usually provide balance sheets for at least __________ years, with the statements shown in comparative, side-by-side format. - Answer- Two The first item in a U.S. balance sheet is usually __________. - Answer- Cash The first item in a NON-U.S. countries balance sheet is usually ________________________. - Answer- Long term assets The order of presentation in a standard balance sheet is? - Answer- current assets, long-term assets, current liabilities, long-term liabilities, and stockholders' equity What is the difference between current assets and liabilities called? - Answer- Working capital Recognition - Answer- the process of condensing all estimates and judgments into one number and reporting that one number in the formal financial statements. Disclosure - Answer- describing details in a narrative note. ____________________ is the preferred method of reporting financial information. - Answer- Recognition Individual transactions impacting balance sheets can be analyzed by remembering that the accounting equation (_________=__________ + ___________) is always maintained. - Answer- Assets = Liabilities + Owners' Equity Transaction analysis - Answer- the process of determining how an economic event impacts financial statements. The discipline imposed by the mathematical necessity of maintaining the accounting equation helps to ensure that all dimensions of the impact of an event on financial statements have been considered. T/F - Answer- True Transaction analysis is NOT a useful exercise in critically and systematically analyzing the impact of business events on a company's reported financial performance and position. T/F - Answer- False. Transaction is very useful Asset Mix - Answer- The proportion of total assets in each asset category, is determined to a large degree by the industry in which the company operates. Net Income - Answer- The amount by which revenues exceed expenses. The primary categories of income statement items are - Answer- revenues, expenses, gains, and losses. Income statement items that do not relate to a company's continuing operations are - Answer- income from discontinued operations and extraordinary items. Individual transactions impacting income can be analyzed using the expanded accounting equation, which is: - Answer- Assets = Liabilities + Paid-in Capital + (Revenues - Expenses - Dividends) An important use of an income statement is to - Answer- forecast income in future periods. Good forecasting requires an understanding of - Answer- what underlying factors determine the level of a revenue or an expense. Accrual accounting - Answer- the process that accountants use in adjusting raw transaction data into refined measures of a firm's economic performance. One of the important economic contributions made by accountants is the collection of accrual accounting rules which, when applied to a company's raw cash flow data, _________________________________________________________. - Answer- result in a superior measure of that company's economic performance