WGU C213 PA & OA Study Guide 2022/2023

1. Which of the following is the most correct definition of accounting(answer) A system for providing quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions 2. What is NOT typically true of accounting information(answer) The information relates to future time periods. 3. Which is NOT a key component of the definition of accounting(answer) Qualitative 4. What is true about the double-entry system of bookkeeping(answer) It was devel- oped in the 1300s 1400s in Italy. 5. Businesses use accounting systems to: Analyze transactions; Handle rou- tine bookkeeping tasks; Evaluate performance and health of the business. 6. What is not a function of accounting(answer) Executing sales transactions for organizations 7. What is NOT one of the three primary financial statements(answer) Statement of retained earnings 8. Generally accepted accounting principles are: Developed by accounting rule makers 9. The initials GAAP stand for: Generally Accepted Accounting Principles 10. The current standard-setting board for accounting in the private sector is the: Financial Accounting Standards Board (FASB) 11. Which of the following organizations has specific legal authority to es- tablish accounting standards for publicly held companies(answer) Securities and Exchange Commission (SEC)