WGU C213 ACCOUNTING QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS) || COMPLETE A+ GUIDE
Accounting - CORRECT ANSWER-A system of providing "quantitative information, primarily
financial in nature, about economic entities that is intended to be useful in making economic
decisions."
Accounting Equation - CORRECT ANSWER-Assets = Liabilities + Owners' Equity
Accounts Payable - CORRECT ANSWER-The flip side of accounts receivable—when one
company sells on credit, creating for itself an account receivable, the company on the other
side of the transaction is buying on credit, creating an account payable.
Accounts Receivable - CORRECT ANSWER-Amounts owed to a business by its credit
customers and are usually collected in cash within 10 to 60 days.
Accrual Accounting - CORRECT ANSWER-The process that accountants use in adjusting raw
transaction data into refined measures of a firm's economic performance.
Accumulated Depreciation - CORRECT ANSWER-Reflects the wear and tear, or depreciation,
of these items since they were originally purchased.
Accumulated Other Comprehensive Income - CORRECT ANSWER-The grouped together and
reported changes which companies experience increases and decreases in equity each year
because of the movement of market prices or exchange rates
Activity-based Costing (ABC) - CORRECT ANSWER-A method of attributing overhead costs to
products based on measurable factors that relate to activities that create overhead costs.
Additional Paid-in Capital - CORRECT ANSWER-Invested by stockholders that exceeds the par
value of the issued shares.
,American Institute of Certified Public Accountants (AICPA) - CORRECT ANSWER-The
professional organization of certified public accountants in the United States.
Asset - CORRECT ANSWER-Probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events.
Asset Mix - CORRECT ANSWER-The proportion of total assets in each asset category, is
determined to a large degree by the industry in which the company operates.
Asset Turnover - CORRECT ANSWER-Sales divided by assets and is interpreted as the number
of dollars in sales generated by each dollar of assets.
Assets - CORRECT ANSWER-The firm's economic resources, formally defined as "probable
future economic benefits obtained or controlled by a particular entity as a result of past
transactions or events
Assets-to-equity Ratio - CORRECT ANSWER-Assets divided by equity and is interpreted as the
number of dollars of assets acquired for each dollar invested by stockholders.
Audit Committee - CORRECT ANSWER-Members of a company's board of directors who are
responsible for dealing with the external and internal auditors.
Average Collection Period - CORRECT ANSWER-Shows the average number of days that
elapse between sale and cash collection.
Balance Sheet - CORRECT ANSWER-A listing of an organization's assets and of its liabilities at
a certain time.
Batch-level Activities - CORRECT ANSWER-Activities that take place in order to support a
batch or production run, regardless of the size of the batch.
Book Value - CORRECT ANSWER-The book value of an asset is the asset's cost minus the
asset's accumulated depreciation.
, Bookkeeping - CORRECT ANSWER-The preservation of a systematic, quantitative record of an
activity.
Breakeven Point - CORRECT ANSWER-The amount of sales at which total costs of the number
of units sold equal total revenues; the point at which there is no profit or loss.
Capital Budgeting - CORRECT ANSWER-Systematic planning for long-term investments in
operating assets.
Capital Lease Obligations - CORRECT ANSWER-A long-term liability in the balance sheet.
Cash - CORRECT ANSWER-Coins and currency as well as the balances in company checking
and savings accounts.
Cash Budget - CORRECT ANSWER-An important tool in helping management plan its cash
needs. This discussion briefly introduces you to budgeting cash receipts.
Cash Equivalents - CORRECT ANSWER-Short-term, highly liquid investments such as Treasury
bills, commercial paper, and money market funds.
Cash Flow Adequacy Ratio - CORRECT ANSWER-Cash from operations divided by
expenditures for fixed asset additions and acquisitions of new businesses
Cash Times Interest Earned Ratio - CORRECT ANSWER-A financial analysis tool that indicates
the interest payment ability of an entity
Certified Public Accountant - CORRECT ANSWER-A person who has taken a minimum
number of college-level accounting classes, has passed the dreaded CPA exam, and has met
other requirements set by his or her state.
Common Stock - CORRECT ANSWER-Stockholders' equity investment
ANSWERS) || COMPLETE A+ GUIDE
Accounting - CORRECT ANSWER-A system of providing "quantitative information, primarily
financial in nature, about economic entities that is intended to be useful in making economic
decisions."
Accounting Equation - CORRECT ANSWER-Assets = Liabilities + Owners' Equity
Accounts Payable - CORRECT ANSWER-The flip side of accounts receivable—when one
company sells on credit, creating for itself an account receivable, the company on the other
side of the transaction is buying on credit, creating an account payable.
Accounts Receivable - CORRECT ANSWER-Amounts owed to a business by its credit
customers and are usually collected in cash within 10 to 60 days.
Accrual Accounting - CORRECT ANSWER-The process that accountants use in adjusting raw
transaction data into refined measures of a firm's economic performance.
Accumulated Depreciation - CORRECT ANSWER-Reflects the wear and tear, or depreciation,
of these items since they were originally purchased.
Accumulated Other Comprehensive Income - CORRECT ANSWER-The grouped together and
reported changes which companies experience increases and decreases in equity each year
because of the movement of market prices or exchange rates
Activity-based Costing (ABC) - CORRECT ANSWER-A method of attributing overhead costs to
products based on measurable factors that relate to activities that create overhead costs.
Additional Paid-in Capital - CORRECT ANSWER-Invested by stockholders that exceeds the par
value of the issued shares.
,American Institute of Certified Public Accountants (AICPA) - CORRECT ANSWER-The
professional organization of certified public accountants in the United States.
Asset - CORRECT ANSWER-Probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events.
Asset Mix - CORRECT ANSWER-The proportion of total assets in each asset category, is
determined to a large degree by the industry in which the company operates.
Asset Turnover - CORRECT ANSWER-Sales divided by assets and is interpreted as the number
of dollars in sales generated by each dollar of assets.
Assets - CORRECT ANSWER-The firm's economic resources, formally defined as "probable
future economic benefits obtained or controlled by a particular entity as a result of past
transactions or events
Assets-to-equity Ratio - CORRECT ANSWER-Assets divided by equity and is interpreted as the
number of dollars of assets acquired for each dollar invested by stockholders.
Audit Committee - CORRECT ANSWER-Members of a company's board of directors who are
responsible for dealing with the external and internal auditors.
Average Collection Period - CORRECT ANSWER-Shows the average number of days that
elapse between sale and cash collection.
Balance Sheet - CORRECT ANSWER-A listing of an organization's assets and of its liabilities at
a certain time.
Batch-level Activities - CORRECT ANSWER-Activities that take place in order to support a
batch or production run, regardless of the size of the batch.
Book Value - CORRECT ANSWER-The book value of an asset is the asset's cost minus the
asset's accumulated depreciation.
, Bookkeeping - CORRECT ANSWER-The preservation of a systematic, quantitative record of an
activity.
Breakeven Point - CORRECT ANSWER-The amount of sales at which total costs of the number
of units sold equal total revenues; the point at which there is no profit or loss.
Capital Budgeting - CORRECT ANSWER-Systematic planning for long-term investments in
operating assets.
Capital Lease Obligations - CORRECT ANSWER-A long-term liability in the balance sheet.
Cash - CORRECT ANSWER-Coins and currency as well as the balances in company checking
and savings accounts.
Cash Budget - CORRECT ANSWER-An important tool in helping management plan its cash
needs. This discussion briefly introduces you to budgeting cash receipts.
Cash Equivalents - CORRECT ANSWER-Short-term, highly liquid investments such as Treasury
bills, commercial paper, and money market funds.
Cash Flow Adequacy Ratio - CORRECT ANSWER-Cash from operations divided by
expenditures for fixed asset additions and acquisitions of new businesses
Cash Times Interest Earned Ratio - CORRECT ANSWER-A financial analysis tool that indicates
the interest payment ability of an entity
Certified Public Accountant - CORRECT ANSWER-A person who has taken a minimum
number of college-level accounting classes, has passed the dreaded CPA exam, and has met
other requirements set by his or her state.
Common Stock - CORRECT ANSWER-Stockholders' equity investment
