Accounting for decision makers C213 WGU_Well Updated and Correct Questions and Answers 100% A+ Graded

Accounting for decision makers C213 WGU_Well Updated and Correct Questions and Answers 100% A+ Graded 1. Prepare 2. Analyze 3. Gather 4. Make decisions 5. Implement 6. Observe. - ANS-Accounting steps. Inside, Internal - ANS-Managerial info is inside or outside the business? True. Financial accounting is only outside. Managerial accounting can be inside AND outside. - ANS-True or false, managerial accounting uses BOTH managerial and financial accounting? Outside, External, includes lenders and investors - ANS-Financial is inside or outside the business? Balance sheet, income statement, and statement of cash flows - ANS-The financial statement includes what 3 documents Balance Sheet - ANS-Point in time, Assets (resources) and liabilities (obligations) Income Statement - ANS-Period of time (usually 1 year), amount of profit made Statement of Cash flows - ANS-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 - ANS-Assets= liabilities + equity Revenue equation - ANS-Net income=Revenue - Expenses Operating, investing, and financial activities - ANS-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). - ANS-The decision makers in the U.S. (accounting rules) GAAP: General accepted accounting principles - ANS-Developed by accounting rule makers. No Legal authority. comparability - ANS-We need accounting rules for... SEC: Security and exchange commission. Located in Article 1, Sec 8, Clause 3 - ANS-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. - ANS-What forms do the SEC regulate? Oversees stock exchanges, can suspend a company, investigate and suspect violations of the SEC rules. - ANS-What does the SEC do? YES. The SEC has legal authority to establish accounting rules and disclosure requirements. - ANS-Does the SEC have legal authority? USA congress->SEC->FASB - ANS-Financial accounting rule per the US constitution FASB: Financial accounting standards board - ANS-The SEC created the GAAP (has no legal authority) - ANS-FASB created AIPCA: American INSTITUTE of certified public accountants. - ANS-What sets auditory standards, continue education credits, CPA exam, and is the code of professional conduct? Only CPA's: Certified public accountants. - ANS-Who is the only person who can sign audit reports? PCAOB: Public company accounting oversight board. - ANS-The Sarbanes-Oxley Act "SOX" created? Under supervision of the SEC. - ANS-PCAOB is under supervision of? PCAOB: Public Company Accounting OVERSIGHT Board. - ANS-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. - ANS-IRS Economic income and accounting income books. & Tax income, and cash flow books. - ANS-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. - ANS-IASB: Internatonal Accounting Standard Board Who enforces and national policies. - ANS-Barriers to international convergence are? Condorsement - ANS-Rules set centrally, but legally adopted and enforced locally? The SEC, SOX, and PCAOB. - ANS-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. - ANS-Financial statements Adudit - ANS-A financial statement that furthermore decreases uncertainty. Income Statement - ANS-Provides accountants the best attempt at measuring the economic performance of a company. Balance sheet - ANS-Mother of all financial statements. Accounting equation - ANS-Assets=liabilities+equity Assets (resoures) - ANS-Resources owned or controlled by a company that will provide probable future economic benefit.