WGU C213 PRE-ASSESSMENT TEST WITH 100% VERIFIED QUESTIONS & ANSWERS

WGU C213 PRE-ASSESSMENT TEST WITH 100% VERIFIED QUESTIONS & ANSWERS What does accounting focus on? The impact a business's activities have on its overall financial performance Which term is defined as the residual interest in the net assets of a company? Owners' equity Which item is an investing activity? Cash payments for purchase of plant assets What impact does the sale of equipment have on the statement of cash flows? Increase in cash from investing activities What is known about the direct and indirect methods of preparing statements of cash flow? The indirect method is more popular among large U.S. companies A corporation has total liabilities of $300 million, total owners' equity of $100 million, and current assets of $50 million. What is the value of the firm's long-term assets? $350 million Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting? In 2014, a company provides services to a customer for which cash will be collected the next year (2015). Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company? Cash flows from financing activities Where would an investor find a summary of a company's significant accounting policies? In the notes to financial statements Which assurance does an external audit report provide for its readers? The company's financial statements fairly reflect its financial position Reliable Information that can be verified Relevant Information having to do with the matter at hand Material Information that is important enough to make a difference Conservatism Information related to recognizing losses as they occur What are steps in the decision cycle? 1 Prepare financial statements. 2 Analyze financial statements. 3 Gather information. 4 Make decision. 5 Implement decision. Partial financial information for a company is as follows: Current assets $36,543 Total assets $58,719 Current liabilities $24,824 Total liabilities $48,561 Stockholders' equity $10,158 Sales $46,997 Net Income $ 3,761 Market value of shares $41,316 What is the price-earnings (PE) ratio for this company? 11.0 What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the same? Continual decrease in sales Which two cash flow adequacy ratios represent a cash cow? $6,991/$5,486. $5,220/$1,875. Which formula yields a cash times interest earned ratio of 11? Cash before interest and taxes of $11,000 / cash paid for interest of $1,000 Which form of debt should be reported in the long-term liability category? Notes payable expected to be paid in 18 months In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred: January 1 The corporation received $1,000,000 in cash in exchange for stock issued to stockholders. January 3 The corporation borrowed $250,000 from bank. The loan is a four-year loan with an interest rate of 12 percent, payable each year on January 1 beginning in year 2. January 5 The corporation purchased equipment to be used in the business for $200,000 cash. January 8 The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers. January 15 The corporation hired five employees. Each employee will be paid $1,000 at the end of each month. January 30 The corporation paid $6,000 cash for a one-year insurance policy. The policy pe Equipment will increase $200,000, and cash will decrease $200,000. In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred: January 1 The corporation received $1,000,000 in cash in exchange for stock issued to stockholders. January 3 The corporation borrowed $250,000 from a bank. The loan is a four-year loan with an interest rate of 12 percent, payable each year on January 1 beginning in year 2. January 5 The corporation purchased equipment to be used in the business for $200,000 cash. January 8 The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers. January 15 The corporation hired five employees. Each employee will be paid $1,000 at the end of each month. January 31 The corporation paid $6,000 cash for a one-year insurance policy. The policy p Prepaid insurance will increase $6,000, and cash will decrease $6,000. Which two values affect the measurement of net income? Choose 2 answers Ordinary gains and losses . Operating expenses Which two items' subtotals are included in a multi-step income statement? Choose 2 answers Gross profit. Income from operations What is a common category in a statement of cash flows? Cash from investing activities Which cash flow category would include "cash received from investors"? Cash from financing activities Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? Statement of cash flows Which users would have a primary concern with an organization's ability to provide healthcare benefits? Employees Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company? The Public Company Accounting Oversight Board (PCAOB) What has had the most significant impact on accounting practices? Information technology What two items of information are revealed on the balance sheet? Choose 2 answers Ownership. Debt A company's statement of cash flows includes the following cash transactions: Sales 1,250,000 Inventory Purchase -750,000 Property and Equipment Purchase -270,000