WGU C213 Accounting for Decision Makers Final Exam Study Guide

WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
Questions and Answers
• What does accounting focus on(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(answer) State- ment of cash flows



• Which users would have a primary concern with an organization's
ability to provide healthcare benefits(answer) Employees

• Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company(answer) The
Public Com- pany Accounting Oversight Board (PCAOB)



• What has had the most significant impact on accounting
practices(answer) Infor- mation technology


• What two items of information are revealed on the balance sheet?

Choose 2 answers:
Ownership. Debt

• Which term is defined as the residual interest in the net assets of
a company(answer) Owners' equity

• A corporation has total liabilities of $300 million, total owners' equity of
WGU C213 Final Exam: ACCOUNTING FOR DECISION
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,WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
$100 million,
Questions andandAnswers
current assets of $50 million.
What is the value of the firm's long-term assets(answer) $350 million

• Which situation should result in revenue recognition on the income
state- ment for the year ending 12/31/14 if the firm is using accrual-basis
account- ing(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(answer) Cash flows from financing activities



• Where would an investor find a summary of a company's
significant accounting policies(answer) 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




WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
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,WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
Questions and
• Relevant: Answershaving to do with the matter at hand
Information

• Material: Information that is important enough to make a difference



• Conservatism: Information related to recognizing losses as they occur

• 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(answer) 11.0

• What is consistent with a continual decline in gross profit if the
firm's cost of goods sold remains the same(answer) Continual
decrease in sales

• Which two cash flow adequacy ratios represent a cash cow(answer) -
WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
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, WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
$6,991/$5,486.
Questions $5,220/$1,875.
and Answers




WGU C213 Final Exam: ACCOUNTING FOR DECISION
MAKERS
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