WGU C213 - ACCOUNTING FOR MBA'S - REVIEW
QUESTIONS
1.1 Which of the following is NOT a function of accounting - Answers - Executing sales
transactions for organizations
1.1 Which of the following is the most correct definition of accounting? - Answers - A
system for providing quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions.
1.1 Businesses use accounting systems to - Answers - Analyze transactions
Handle routine bookkeeping tasks
Evaluate the performance and health of the business
**All of these are correct
1.1 Which of the following is NOT a key component of the definition of accounting? -
Answers - Qualitative
1.1 Which of the following is NOT typically true of accounting information? - Answers -
The information relates to future time periods.
1.2 Which of the following is NOT one of the three primary financial statements? -
Answers - Statement of retained earnings
1.2 Which of the following financial statements reports a company's resources,
obligations, and owner's equity? - Answers - Balance sheet
1.2 Which of the following financial statements reports the excess of a company's
revenues over its expenses? - Answers - Income statement
1.2 Which of the following financial statements reports the amount of cash collected and
paid out by a company? - Answers - Statement of cash flows
1.3 The emphasis in financial accounting is on which of the following external user
groups? - Answers - Investors and creditors
1.3 The primary internal group that uses accounting information is - Answers -
Management
1.3 Internal reports are generally used by - Answers - Management
1.3 Which of the following is NOT an external user of financial information - Answers -
Management
,1.4 Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - Answers - It is a government agency
1.4 Generally accepted accounting principles are - Answers - Developed by
accounting rule makers
1.4 The initials GAAP stand for - Answers - Generally Accepted Accounting Principles
1.4 The current standard-setting board for accounting in the private sector is the -
Answers - Financial Accounting Standards Board (FASB)
1.5 Which of the following organizations has specific legal authority to establish
accounting standards for publicly held companies? - Answers - Securities and
Exchange Commission (SEC)
1.5 The organization that develops worldwide accounting standards is the - Answers -
International Accounting Standards Board (IASB)
1.5 The initials CPA stand for - Answers - Certified Public Accountant
1.5 Which of the following is NOT a service typically provided by large public accounting
firms? - Answers - Making management decisions
1.5 Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - Answers -
Internal Revenue Service
1.6 Which of the following is NOT a reason for the integration of worldwide accounting
standards? - Answers - the theoretical necessity of a common set of accounting
standards
1.6 The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices - Answers - True
1.6 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. - Answers - False
While the technology may be available, companies are still not allowing outsiders
access to their internal accounting records.
1.6 Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - - Answers - Sarbanes-Oxley Act
2.1 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 - Answers - True
,2.1 Which of the following is NOT one of the three primary financial statements? -
Answers - The Statement of Retained Earnings
2.1 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. -
Answers - true
2.2 Which of the following types of accounts are NOT found on the balance sheet? -
Answers - Revenues
2.2 Markanich Company purchased land for $90,000 in 2010.
In 2013, the land is valued at $115,000.
The land would appear on the company's books in 2013 at - Answers - $90,000
2.2 Which of the following would be considered a long-term liability? - Answers -
Mortgage payable
2.2 Which of the following accounts is considered to be the most liquid? - Answers -
Cash
2.2 The basic accounting equation is - Answers - Assets = Liabilities + Owners' Equity
2.3 Which of the following would be included on an income statement? - Answers -
Rent expense
2.3 Resource increases from the sale of goods or services are called - Answers -
Revenues
2.3 Revenues cause - Answers - An increase in net assets
2.3 Expenses generally cause - Answers - A decrease in net assets
2.3 Expense and revenue accounts appear on the - Answers - Income statement
2.4 A major source of cash from operating activities is - Answers - Receipts from sale
of goods
2.4 Which of the following is a primary use of cash? - Answers - Operating expenses
2.4 Which of the following classifications refers to those activities associated with buying
and selling long-term assets? - Answers - Investing
2.4 During the month, Meridian Company had the following cash transactions:
Cash collected from customers
, $ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
(5,750)
Cash paid for the purchase of a building
(15,000)
Cash received for the issuance of new shares of stock
2,600
Cash received from sale of land
6,400
Cash paid for rent
(2,500)
Cash paid for dividends
(1,500)
Given the above information, compute cash flow from operating activities. - Answers -
$4,250
Operating activities: $12,500 - $5,750 - $2,500 = $4,250
2.4 During the month, Meridian Company had the following cash transactions:
Cash collected from customers
$ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
QUESTIONS
1.1 Which of the following is NOT a function of accounting - Answers - Executing sales
transactions for organizations
1.1 Which of the following is the most correct definition of accounting? - Answers - A
system for providing quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions.
1.1 Businesses use accounting systems to - Answers - Analyze transactions
Handle routine bookkeeping tasks
Evaluate the performance and health of the business
**All of these are correct
1.1 Which of the following is NOT a key component of the definition of accounting? -
Answers - Qualitative
1.1 Which of the following is NOT typically true of accounting information? - Answers -
The information relates to future time periods.
1.2 Which of the following is NOT one of the three primary financial statements? -
Answers - Statement of retained earnings
1.2 Which of the following financial statements reports a company's resources,
obligations, and owner's equity? - Answers - Balance sheet
1.2 Which of the following financial statements reports the excess of a company's
revenues over its expenses? - Answers - Income statement
1.2 Which of the following financial statements reports the amount of cash collected and
paid out by a company? - Answers - Statement of cash flows
1.3 The emphasis in financial accounting is on which of the following external user
groups? - Answers - Investors and creditors
1.3 The primary internal group that uses accounting information is - Answers -
Management
1.3 Internal reports are generally used by - Answers - Management
1.3 Which of the following is NOT an external user of financial information - Answers -
Management
,1.4 Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - Answers - It is a government agency
1.4 Generally accepted accounting principles are - Answers - Developed by
accounting rule makers
1.4 The initials GAAP stand for - Answers - Generally Accepted Accounting Principles
1.4 The current standard-setting board for accounting in the private sector is the -
Answers - Financial Accounting Standards Board (FASB)
1.5 Which of the following organizations has specific legal authority to establish
accounting standards for publicly held companies? - Answers - Securities and
Exchange Commission (SEC)
1.5 The organization that develops worldwide accounting standards is the - Answers -
International Accounting Standards Board (IASB)
1.5 The initials CPA stand for - Answers - Certified Public Accountant
1.5 Which of the following is NOT a service typically provided by large public accounting
firms? - Answers - Making management decisions
1.5 Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - Answers -
Internal Revenue Service
1.6 Which of the following is NOT a reason for the integration of worldwide accounting
standards? - Answers - the theoretical necessity of a common set of accounting
standards
1.6 The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices - Answers - True
1.6 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. - Answers - False
While the technology may be available, companies are still not allowing outsiders
access to their internal accounting records.
1.6 Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - - Answers - Sarbanes-Oxley Act
2.1 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 - Answers - True
,2.1 Which of the following is NOT one of the three primary financial statements? -
Answers - The Statement of Retained Earnings
2.1 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. -
Answers - true
2.2 Which of the following types of accounts are NOT found on the balance sheet? -
Answers - Revenues
2.2 Markanich Company purchased land for $90,000 in 2010.
In 2013, the land is valued at $115,000.
The land would appear on the company's books in 2013 at - Answers - $90,000
2.2 Which of the following would be considered a long-term liability? - Answers -
Mortgage payable
2.2 Which of the following accounts is considered to be the most liquid? - Answers -
Cash
2.2 The basic accounting equation is - Answers - Assets = Liabilities + Owners' Equity
2.3 Which of the following would be included on an income statement? - Answers -
Rent expense
2.3 Resource increases from the sale of goods or services are called - Answers -
Revenues
2.3 Revenues cause - Answers - An increase in net assets
2.3 Expenses generally cause - Answers - A decrease in net assets
2.3 Expense and revenue accounts appear on the - Answers - Income statement
2.4 A major source of cash from operating activities is - Answers - Receipts from sale
of goods
2.4 Which of the following is a primary use of cash? - Answers - Operating expenses
2.4 Which of the following classifications refers to those activities associated with buying
and selling long-term assets? - Answers - Investing
2.4 During the month, Meridian Company had the following cash transactions:
Cash collected from customers
, $ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
(5,750)
Cash paid for the purchase of a building
(15,000)
Cash received for the issuance of new shares of stock
2,600
Cash received from sale of land
6,400
Cash paid for rent
(2,500)
Cash paid for dividends
(1,500)
Given the above information, compute cash flow from operating activities. - Answers -
$4,250
Operating activities: $12,500 - $5,750 - $2,500 = $4,250
2.4 During the month, Meridian Company had the following cash transactions:
Cash collected from customers
$ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
