WGU c213 test UPDATED ACTUAL Exam
Questions and CORRECT Answers
Accounting - CORRECT ANSWER the recording of the day-to-day financial activities of a
company and the organization of that information into summary reports used to evaluate the
company's financial status
Bookkeeping - CORRECT ANSWER the preservation of a systematic, quantitative record of
an activity
accounting system - CORRECT ANSWER used by a business to handle routine bookkeeping
tasks and to structure the information so it can be used to evaluate the performance and financial
status of the business
Accounting information - CORRECT ANSWER Info that is intended to be useful in making
decisions about the future.
The balance sheet, the income statement, and the statement of cashflows - CORRECT
ANSWER What are the three primary financial statements?
External Users - CORRECT ANSWER Who is financial accounting information primarily
prepared for and used by?
Managerial Accounting - CORRECT ANSWER the name given to accounting systems
designed for internal users
Balance Sheet - CORRECT ANSWER Reports a company's assets, liabilities, and owners'
equity
Income Statement - CORRECT ANSWER reports the amount of net income earned by a
company during a period
, Net income - CORRECT ANSWER the excess of a company's revenues over its expenses
statement of cash flows - CORRECT ANSWER reports the amount of cash collected and paid
out by a company in the following three types of activities: operating, investing, and financing
FASB - CORRECT ANSWER Which private body establishes accounting rules in the U.S.?
Financial Accounting Standards Board (FASB) - CORRECT ANSWER a private body
established and supported by the joint efforts of the U.S. business community, financial analysts,
and practicing accountants
The Securities and Exchange Commission (SEC) - CORRECT ANSWER the organization
that regulates U.S. stock exchanges and seeks to create a fair information environment in which
investors can buy and sell stocks without fear that companies are hiding or manipulating
financial data
American Institute of Certified Public Accountants (AICPA) - CORRECT ANSWER the
professional organization of certified public accountants (CPAs) in the United States
Public Company Accounting Oversight Board (PCAOB) - CORRECT ANSWER the
organization that inspects the audit practices of registered audit firms and has statutory authority
to investigate questionable audit practices and to impose sanctions such as barring an audit firm
from auditing SEC-registered companies
Internal Revenue Service (IRS) - CORRECT ANSWER Gov't agency that establishes rules to
define exactly when income should be taxed. It has no role in setting financial accounting rules;
and a company's financial statements are not used in determining how much tax the company
must pay
The International Accounting Standards Board (IASB) - CORRECT ANSWER Organization
that was formed to develop a common set of worldwide accounting standards. Its standards are
increasingly accepted worldwide, but FASB rules are still the standard in the United States.
Questions and CORRECT Answers
Accounting - CORRECT ANSWER the recording of the day-to-day financial activities of a
company and the organization of that information into summary reports used to evaluate the
company's financial status
Bookkeeping - CORRECT ANSWER the preservation of a systematic, quantitative record of
an activity
accounting system - CORRECT ANSWER used by a business to handle routine bookkeeping
tasks and to structure the information so it can be used to evaluate the performance and financial
status of the business
Accounting information - CORRECT ANSWER Info that is intended to be useful in making
decisions about the future.
The balance sheet, the income statement, and the statement of cashflows - CORRECT
ANSWER What are the three primary financial statements?
External Users - CORRECT ANSWER Who is financial accounting information primarily
prepared for and used by?
Managerial Accounting - CORRECT ANSWER the name given to accounting systems
designed for internal users
Balance Sheet - CORRECT ANSWER Reports a company's assets, liabilities, and owners'
equity
Income Statement - CORRECT ANSWER reports the amount of net income earned by a
company during a period
, Net income - CORRECT ANSWER the excess of a company's revenues over its expenses
statement of cash flows - CORRECT ANSWER reports the amount of cash collected and paid
out by a company in the following three types of activities: operating, investing, and financing
FASB - CORRECT ANSWER Which private body establishes accounting rules in the U.S.?
Financial Accounting Standards Board (FASB) - CORRECT ANSWER a private body
established and supported by the joint efforts of the U.S. business community, financial analysts,
and practicing accountants
The Securities and Exchange Commission (SEC) - CORRECT ANSWER the organization
that regulates U.S. stock exchanges and seeks to create a fair information environment in which
investors can buy and sell stocks without fear that companies are hiding or manipulating
financial data
American Institute of Certified Public Accountants (AICPA) - CORRECT ANSWER the
professional organization of certified public accountants (CPAs) in the United States
Public Company Accounting Oversight Board (PCAOB) - CORRECT ANSWER the
organization that inspects the audit practices of registered audit firms and has statutory authority
to investigate questionable audit practices and to impose sanctions such as barring an audit firm
from auditing SEC-registered companies
Internal Revenue Service (IRS) - CORRECT ANSWER Gov't agency that establishes rules to
define exactly when income should be taxed. It has no role in setting financial accounting rules;
and a company's financial statements are not used in determining how much tax the company
must pay
The International Accounting Standards Board (IASB) - CORRECT ANSWER Organization
that was formed to develop a common set of worldwide accounting standards. Its standards are
increasingly accepted worldwide, but FASB rules are still the standard in the United States.
