1|P age
WGU C213 FINAL EXAM - ACCOUNTING FOR
DECISION MAKERS ACCURATE AND FREQUENTLY
TESTED QUESTIONS AND 100% CORRECT
ANSWERS|| LATEST AND COMPLETE UPDATE WITH
EXPERT VERIFIED SOLUTIONS|| SURE PASS
• 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
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• 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
$100 million, and 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
, 3|P age
• Relevant: Information having to do with the matter at hand
• 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: -
$6,991/$5,486. $5,220/$1,875.
• Which formula yields a cash times interest earned ratio of 11- ANSWER:
Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
WGU C213 FINAL EXAM - ACCOUNTING FOR
DECISION MAKERS ACCURATE AND FREQUENTLY
TESTED QUESTIONS AND 100% CORRECT
ANSWERS|| LATEST AND COMPLETE UPDATE WITH
EXPERT VERIFIED SOLUTIONS|| SURE PASS
• 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
,2|P age
• 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
$100 million, and 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
, 3|P age
• Relevant: Information having to do with the matter at hand
• 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: -
$6,991/$5,486. $5,220/$1,875.
• Which formula yields a cash times interest earned ratio of 11- ANSWER:
Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
