C213 WGU OA Prep Expected
Questions and answers.
The ability a company has to pay its debts in the short run is its
Liquidity
Which of the following is a measure of the liquid position of a corporation?
Debt ratio
Which of the following ratios is used to measure a firm's leverage?
Debt Ratio
Which of the following ratios is used to measure the profit earned on each dollar
invested in a firm?
Return on Equity
The emphasis in financial accounting is on which of the following external user
groups?
Investors and creditors
The primary internal group that uses accounting information is
Management
Internal reports are generally used by
Management
Which of the following is NOT an external user of financial information?
Management
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)?
It is a government agency
Generally accepted accounting principles are
Developed by accounting rule makers
The initials GAAP stand for
Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the
Financial Accounting Standards Board (FASB)
The organization that develops worldwide accounting standards is the
International Accounting Standards Board (IASB)
The initials CPA stand for
Certified Public Accountant
Which of the following is NOT a service typically provided by large public
accounting firms?
Making management decisions
Standards established by the International Accounting Standards Board are
referred to as
International Financial Reporting Standards
Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States?
Internal Revenue Service
, Which of the following is NOT a reason for the integration of worldwide
accounting standards?
the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices?
True
With the current state of information technology, investors outside a company
are now allowed access to a company's internal database of financial information
and do their own customized analysis of a firm's performance.
False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress -
Sarbanes-Oxley Act
A borrower benefits from providing financial information regarding income and
expenses in the form of a lower interest rate on the loan because of reduced
uncertainty for the lender with regard to repayment.
True
Which of the following is NOT one of the three primary financial statements?
The Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to
reduce uncertainty for an investor regarding the firm's future financial
performance.
True
Which of the following accounts is considered to be the most liquid?
Cash
Which of the following types of accounts are NOT found on the balance sheet?
Revenues
The financial statement that reports resources owned, the obligations to transfer
resources to other organizations, and the claims by the entity's owners is known
as the
Balance sheet
The idea that the activities of the entity are to be separated from those of the
individual owner is the
Separate entity concept
The basic accounting equation is
Assets = Liabilities + Owners' Equity
Which of the following would be included on an income statement?
Rent expense
Costs that are incurred during the normal operations of a business to generate
revenues are called
Expenses
Another name for the income statement is
Statement of earnings
Revenues cause
An increase in net assets
Questions and answers.
The ability a company has to pay its debts in the short run is its
Liquidity
Which of the following is a measure of the liquid position of a corporation?
Debt ratio
Which of the following ratios is used to measure a firm's leverage?
Debt Ratio
Which of the following ratios is used to measure the profit earned on each dollar
invested in a firm?
Return on Equity
The emphasis in financial accounting is on which of the following external user
groups?
Investors and creditors
The primary internal group that uses accounting information is
Management
Internal reports are generally used by
Management
Which of the following is NOT an external user of financial information?
Management
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)?
It is a government agency
Generally accepted accounting principles are
Developed by accounting rule makers
The initials GAAP stand for
Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the
Financial Accounting Standards Board (FASB)
The organization that develops worldwide accounting standards is the
International Accounting Standards Board (IASB)
The initials CPA stand for
Certified Public Accountant
Which of the following is NOT a service typically provided by large public
accounting firms?
Making management decisions
Standards established by the International Accounting Standards Board are
referred to as
International Financial Reporting Standards
Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States?
Internal Revenue Service
, Which of the following is NOT a reason for the integration of worldwide
accounting standards?
the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices?
True
With the current state of information technology, investors outside a company
are now allowed access to a company's internal database of financial information
and do their own customized analysis of a firm's performance.
False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress -
Sarbanes-Oxley Act
A borrower benefits from providing financial information regarding income and
expenses in the form of a lower interest rate on the loan because of reduced
uncertainty for the lender with regard to repayment.
True
Which of the following is NOT one of the three primary financial statements?
The Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to
reduce uncertainty for an investor regarding the firm's future financial
performance.
True
Which of the following accounts is considered to be the most liquid?
Cash
Which of the following types of accounts are NOT found on the balance sheet?
Revenues
The financial statement that reports resources owned, the obligations to transfer
resources to other organizations, and the claims by the entity's owners is known
as the
Balance sheet
The idea that the activities of the entity are to be separated from those of the
individual owner is the
Separate entity concept
The basic accounting equation is
Assets = Liabilities + Owners' Equity
Which of the following would be included on an income statement?
Rent expense
Costs that are incurred during the normal operations of a business to generate
revenues are called
Expenses
Another name for the income statement is
Statement of earnings
Revenues cause
An increase in net assets
