Western Governors University D 072
WGU C213 Final Exam Questions and Answers
,Order of assets listed on the balance sheet
Assets are listed in the order of liquidity. Liquidity is the amount of time it would usually
take to covert an asset into cash. Obviously, cash would be listed first, followed by
marketable investments (a company can quickly convert a short-term investment into
cash). Accounts receivable would be listed next followed by inventory, and long-term
investments, fixed assets, and intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no specific order they
are listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance sheet; although,
typically you will see paid-in-capital followed by retained earnings followed by
accumulated other comprehensive income, and lastly, treasury stock.
Difference between a manufacturing company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead
Manufacturing Co Selling Costs Direct Labor
Administrative Costs Manufacturing Overhead
Direct Materials (inventory
The only difference is - a manufacturing company has direct materials (inventory).
, Evaluating a historical income statement to project a future income statement.
Projected growth for 2017 = 10% increase over 2016 sales.
Step 1: Convert the income statement into a common-sized income statement.
Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the forecasted 2017 sales. Then
multiply the projected 2017 sales by the percentages from step 1.
Now, what would you do if you were given the 2017 sales figure and you need to calculate
the 2016 sales figure based off the 10% growth for 2017?
Calculation for 2016: 110,.10 = 100,000
WGU C213 Final Exam Questions and Answers
,Order of assets listed on the balance sheet
Assets are listed in the order of liquidity. Liquidity is the amount of time it would usually
take to covert an asset into cash. Obviously, cash would be listed first, followed by
marketable investments (a company can quickly convert a short-term investment into
cash). Accounts receivable would be listed next followed by inventory, and long-term
investments, fixed assets, and intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no specific order they
are listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance sheet; although,
typically you will see paid-in-capital followed by retained earnings followed by
accumulated other comprehensive income, and lastly, treasury stock.
Difference between a manufacturing company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead
Manufacturing Co Selling Costs Direct Labor
Administrative Costs Manufacturing Overhead
Direct Materials (inventory
The only difference is - a manufacturing company has direct materials (inventory).
, Evaluating a historical income statement to project a future income statement.
Projected growth for 2017 = 10% increase over 2016 sales.
Step 1: Convert the income statement into a common-sized income statement.
Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the forecasted 2017 sales. Then
multiply the projected 2017 sales by the percentages from step 1.
Now, what would you do if you were given the 2017 sales figure and you need to calculate
the 2016 sales figure based off the 10% growth for 2017?
Calculation for 2016: 110,.10 = 100,000
