Accounting for decision makers C213 WGU Exam Questions and Answers 100% Pass

Accounting for decision makers C213 WGU Exam Questions and Answers 100% Pass 1. Prepare 2. Analyze 3. Gather 4. Make decisions 5. Implement 6. Observe. - Answer- Accounting steps. Inside, Internal - Answer- Managerial info is inside or outside the business? True. Financial accounting is only outside. Managerial accounting can be inside AND outside. - Answer- True or false, managerial accounting uses BOTH managerial and financial accounting? Outside, External, includes lenders and investors - Answer- Financial is inside or outside the business? Balance sheet, income statement, and statement of cash flows - Answer- The financial statement includes what 3 documents Balance Sheet - Answer- Point in time, Assets (resources) and liabilities (obligations) Income Statement - Answer- Period of time (usually 1 year), amount of profit made Statement of Cash flows - Answer- Period of time, where money came from, and where it went. Inflow and outflow of cash (Cash Flows). Change in money for the period. Balance sheet equation - Answer- Assets= liabilities + equity Revenue equation - Answer- Net income=Revenue - Expenses Operating, investing, and financial activities - Answer- The statement of cash flows includes what three activities FASB: Financial accounting standards. Private, no government involvement. It is a public process, includes individuals experienced in business and accounting (7 members). - Answer- The decision makers in the U.S. (accounting rules) GAAP: General accepted accounting principles - Answer- Developed by accounting rule makers. No Legal authority. comparability - Answer- We need accounting rules for... SEC: Security and exchange commission. Located in Article 1, Sec 8, Clause 3 - Answer- U.S. gov agency responsible for ensuring that investors, creditors, and other financial statement users are provided with reliable information. It watches behavior in financial markets. Registration statements (prospectus), Form 10-K, Form 10-Q, and schedule 14A (proxy statement). These are all publicly viewable. - Answer- What forms do the SEC regulate? Oversees stock exchanges, can suspend a company, investigate and suspect violations of the SEC rules. - Answer- What does the SEC do? YES. The SEC has legal authority to establish accounting rules and disclosure requirements. - Answer- Does the SEC have legal authority? USA congress->SEC->FASB - Answer- Financial accounting rule per the US constitution FASB: Financial accounting standards board - Answer- The SEC created the GAAP (has no legal authority) - Answer- FASB created AIPCA: American INSTITUTE of certified public accountants. - Answer- What sets auditory standards, continue education credits, CPA exam, and is the code of professional conduct? Only CPA's: Certified public accountants. - Answer- Who is the only person who can sign audit reports? PCAOB: Public company accounting oversight board. - Answer- The Sarbanes-Oxley Act "SOX" created? Under supervision of the SEC. - Answer- PCAOB is under supervision of? PCAOB: Public Company Accounting OVERSIGHT Board. - Answer- Who appoints members, approves actions, gov standards, inspections, and investigations? It is a private group and OVERSEES. AUDITORS? U.S. Gov agency that collects and regulates income taxes. Their primary goal is to collect revenue. - Answer- IRS Economic income and accounting income books. & Tax income, and cash flow books. - Answer- There are two sets of books. Tax Books and Financial accounting books. Similar to the FASB, but not 100% the same. It is international, everywhere but the U.S. - Answer- IASB: Internatonal Accounting Standard Board Who enforces and national policies. - Answer- Barriers to international convergence are? Condorsement - Answer- Rules set centrally, but legally adopted and enforced locally? The SEC, SOX, and PCAOB. - Answer- To increase government regulation, one would use: Reduce uncertainty and allows lenders and investors to target their financing and investing to the level of risk they are willing to take. - Answer- Financial statements Adudit - Answer- A financial statement that furthermore decreases uncertainty. Income Statement - Answer- Provides accountants the best attempt at measuring the economic performance of a company. Balance sheet - Answer- Mother of all financial statements. Accounting equation - Answer- Assets=liabilities+equity Assets (resoures) - Answer- Resources owned or controlled by a company that will provide probable future economic benefit. Liabilities (obligations) - Answer- Obligations that require the probable future sacrifice of economic benefits in the form of the transfer of assets or the providing of services. Equity - Answer- Investment amount in the business PLUS how much profit they have left in the business. L-A=E 1 paid in capital, 2 retained earnings, 3 treasure stock, 4 accumulated other comprehensive income. - Answer- Owners Equity PIC: Paid in capital - Answer- The amount originally paid in exchange for share of stock Retained earnings - Answer- CUMMULATIVE earnings that have been retained in the business Treasury stock - Answer- Company buys back its own shares of stock, shown as a subtraction from equity. AOCI: Accumulated other comprehensive income.Market related gains and losses that are not included on the income statement. - Answer- MARKET EVENTS that result in an increase or decrease in equity are