WGU C213 Pre Assessment 2022
What does accounting focus on? - CORRECT ANSWER-The impact a
business's activities have on its overall financial performance
Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time? - CORRECT
ANSWER-Statement of cash flows
Which users would have a primary concern with an organization's ability to
provide healthcare benefits? - CORRECT ANSWER-Employees
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? - CORRECT ANSWER-The
Public Company Accounting Oversight Board (PCAOB)
What has had the most significant impact on accounting practices? - CORRECT
ANSWER-Information technology
What two items of information are revealed on the balance sheet?
Choose 2 answers - CORRECT ANSWER-Ownership.
Debt
Which term is defined as the residual interest in the net assets of a company? -
CORRECT ANSWER-Owners' equity
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? - CORRECT ANSWER-$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? -
,CORRECT ANSWER-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? - CORRECT ANSWER-Cash
flows from financing activities
Where would an investor find a summary of a company's significant accounting
policies? - CORRECT ANSWER-In the notes to financial statements
Which assurance does an external audit report provide for its readers? -
CORRECT ANSWER-The company's financial statements fairly reflect its
financial position
Reliable - CORRECT ANSWER-Information that can be verified
Relevant - CORRECT ANSWER-Information having to do with the matter at hand
Material - CORRECT ANSWER-Information that is important enough to make a
difference
Conservatism - CORRECT ANSWER-Information related to recognizing losses
as they occur
What are steps in the decision cycle? - CORRECT ANSWER-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? - CORRECT
ANSWER-11.0
What is consistent with a continual decline in gross profit if the firm's cost of
goods sold remains the same? - CORRECT ANSWER-Continual decrease in
sales
Which two cash flow adequacy ratios represent a cash cow? - CORRECT
ANSWER-$6,991/$5,486. $5,220/$1,875.
Which formula yields a cash times interest earned ratio of 11? - CORRECT
ANSWER-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? -
CORRECT ANSWER-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.
What does accounting focus on? - CORRECT ANSWER-The impact a
business's activities have on its overall financial performance
Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time? - CORRECT
ANSWER-Statement of cash flows
Which users would have a primary concern with an organization's ability to
provide healthcare benefits? - CORRECT ANSWER-Employees
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? - CORRECT ANSWER-The
Public Company Accounting Oversight Board (PCAOB)
What has had the most significant impact on accounting practices? - CORRECT
ANSWER-Information technology
What two items of information are revealed on the balance sheet?
Choose 2 answers - CORRECT ANSWER-Ownership.
Debt
Which term is defined as the residual interest in the net assets of a company? -
CORRECT ANSWER-Owners' equity
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? - CORRECT ANSWER-$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? -
,CORRECT ANSWER-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? - CORRECT ANSWER-Cash
flows from financing activities
Where would an investor find a summary of a company's significant accounting
policies? - CORRECT ANSWER-In the notes to financial statements
Which assurance does an external audit report provide for its readers? -
CORRECT ANSWER-The company's financial statements fairly reflect its
financial position
Reliable - CORRECT ANSWER-Information that can be verified
Relevant - CORRECT ANSWER-Information having to do with the matter at hand
Material - CORRECT ANSWER-Information that is important enough to make a
difference
Conservatism - CORRECT ANSWER-Information related to recognizing losses
as they occur
What are steps in the decision cycle? - CORRECT ANSWER-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? - CORRECT
ANSWER-11.0
What is consistent with a continual decline in gross profit if the firm's cost of
goods sold remains the same? - CORRECT ANSWER-Continual decrease in
sales
Which two cash flow adequacy ratios represent a cash cow? - CORRECT
ANSWER-$6,991/$5,486. $5,220/$1,875.
Which formula yields a cash times interest earned ratio of 11? - CORRECT
ANSWER-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? -
CORRECT ANSWER-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.
