WGU C213 PA & OA Study Guide Questions and Answers

WGU C213 PA & OA Study Guide Questions and Answers The impact a business's activities have on its overall financial performance What does accounting focus on? Statement of cash flows Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? Employees Which users would have a primary concern with an organization's ability to provide healthcare benefits? An increase in its compatibility to other companies Which benefit does a corporation gain by following Generally Accepted Accounting Principles (GAPP)? The Public Company Accounting Oversight Board (PACOB) Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company? Information technology What has had the most significant impact on Accounting practices? Ownership and Debt What two items of information are revealed on the balance sheet? Owners equity Which term is defined as the residual in the net assets of a company? In 2014, a company provides services to a customer for which cash will be collected the next year (2015). Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual accounting? Cash from financing activities Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company? In the notes to financial statements Where would an investor find a summary of a company's significant accounting policies? The company's financial statements fairly reflect its financial position Which assurance does an external audit report provide for its readers? Reliable Information that can be verified 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 Continual decrease in sales What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the same? Notes payable expected to be paid in 18 months Which form of debt should be reported in the long-term liability category? Operating expenses & Ordinary gains and losses Which values affect the measurement of net income? Gross profit & Income from operations Which items' subtotals are included in a multi-step income statement? Cash from investing activities What is a common category in a statement of cash flows? Cash from financing activities Which cash flow category would include "cash received from investors"? Cash payments for purchase of plant assets Which item is an investing activity? Increase in cash from investing activities What impact does the sale of equipment have on the statement of cash flows? The indirect method is more popular among large U.S. companies What is known about the direct and indirect methods of preparing statements of cash flow? The inventory department counts and inspects items as received and forwards the receiving record to accounts payable. Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an invoice that includes more items than were actually received? Pressure to meet internal sales goals & Preparing to qualify for a bank loan What are common reasons for managers to manipulate reported earnings? Firms must not provide certain non-audit services to audit clients, such as management functions or legal services. & Firms must report to and be retained by the audit committee rather than the CFO or other company management. Which requirements must accounting firms that audit public companies meet under the Sarbanes-Oxley Act? They search for and investigate fraud. &