WGU D103: Intermediate Accounting I - Essential Topics
from Units 2-4
APB Opinions - correct answer ✔✔The APB's official pronouncements issued from 1959 through 1973
which were intended to be based mainly on research studies and be supported by reasons and analysis.
Accounting Principles Board (APB) - correct answer ✔✔An accounting rule-making board which provided
official pronouncements, called APB Opinions, from 1959 through 1973.
Accounting Research Bulletins - correct answer ✔✔Pronouncements issued by CAP dealing with a
variety of timely accounting problems during the years 1939 to 1959.
Accrued Expenses - correct answer ✔✔Expenses incurred but not yet paid.
Accrued Revenues - correct answer ✔✔Revenues for which the performance obligation has been
satisfied, but for which cash has not yet been received.
Adjusted Trial Balance - correct answer ✔✔A trial balance prepared immediately after all adjustments
have been posted.
Adjusting Entries - correct answer ✔✔Entries made at the end of an accounting period to bring all
accounts up to date on an accrual accounting basis.
American Institute of Certified Public Accountants (AICPA) - correct answer ✔✔The national professional
organization of practicing Certified Public Accountants.
Book Value - correct answer ✔✔The difference between the cost of an asset and its related accumulated
depreciation.
Closing Process - correct answer ✔✔The formal process by which all nominal accounts are reduced to
zero to prepare the accounts for the next period's transactions.
,Committee On Accounting Procedure (CAP) - correct answer ✔✔An organization composed of practicing
CPAs which issued Accounting Research Bulletins dealing with a variety of accounting problems during
the years 1939 to 1959.
Comparability - correct answer ✔✔Ability to compare accounting information of different companies
because they measure and report information in a similar manner.
Completeness - correct answer ✔✔All information necessary for faithful representation is provided.
Conceptual Framework - correct answer ✔✔A coherent system of interrelated objectives and
fundamentals that can lead to consistent standards.
Confirmatory Value - correct answer ✔✔Information that confirms or corrects prior expectations.
Consistency - correct answer ✔✔An entity applies the same accounting treatment to similar events from
period to period.
Contra Asset Account - correct answer ✔✔An account that offsets an asset account on the balance
sheet.
Cost Constraint - correct answer ✔✔The constraint that states that information should be provided only
if the benefits of providing such information outweigh the costs of providing it.
Cost-benefit Relationship - correct answer ✔✔The costs of something weighed against the benefits that
can be derived.
Current Assets - correct answer ✔✔Cash and other assets expected to be converted into cash, sold, or
consumed either in one year or in the operating cycle, whichever is longer.
Current Liabilities - correct answer ✔✔Obligations that are reasonably expected to be liquidated either
through the use of current assets or the creation of other current liabilities within the longer of 1 year or
the operating cycle.
, Current Operating Performance Approach - correct answer ✔✔A concept that states that the net income
figure should show only the regular, recurring earnings of the business.
Depreciation - correct answer ✔✔The process of allocating the cost of an asset to expense over its
useful life in a rational and systematic manner.
Discontinued Operation - correct answer ✔✔The disposal of a component of a business or the
elimination of a component that represents a strategic shift.
Earnings Management - correct answer ✔✔The planned timing of revenues, expenses, gains, and losses.
Earnings Per Share - correct answer ✔✔The net income earned by each share of outstanding common
stock.
Economic Entity Assumption - correct answer ✔✔An assumption that states economic activity can be
identified with a particular unit of accountability.
Expense Recognition Principle - correct answer ✔✔The recognition of expenses is related to revenues;
"Let the expense follow the revenue."
Fair Value - correct answer ✔✔Defined as "the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date."
Fair Value Principle - correct answer ✔✔Defined as "the amount for which an asset could be exchanged,
a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing
parties in an arm's length transaction."
Faithful Representation - correct answer ✔✔The numbers and descriptions represent what really existed
or happened.
from Units 2-4
APB Opinions - correct answer ✔✔The APB's official pronouncements issued from 1959 through 1973
which were intended to be based mainly on research studies and be supported by reasons and analysis.
Accounting Principles Board (APB) - correct answer ✔✔An accounting rule-making board which provided
official pronouncements, called APB Opinions, from 1959 through 1973.
Accounting Research Bulletins - correct answer ✔✔Pronouncements issued by CAP dealing with a
variety of timely accounting problems during the years 1939 to 1959.
Accrued Expenses - correct answer ✔✔Expenses incurred but not yet paid.
Accrued Revenues - correct answer ✔✔Revenues for which the performance obligation has been
satisfied, but for which cash has not yet been received.
Adjusted Trial Balance - correct answer ✔✔A trial balance prepared immediately after all adjustments
have been posted.
Adjusting Entries - correct answer ✔✔Entries made at the end of an accounting period to bring all
accounts up to date on an accrual accounting basis.
American Institute of Certified Public Accountants (AICPA) - correct answer ✔✔The national professional
organization of practicing Certified Public Accountants.
Book Value - correct answer ✔✔The difference between the cost of an asset and its related accumulated
depreciation.
Closing Process - correct answer ✔✔The formal process by which all nominal accounts are reduced to
zero to prepare the accounts for the next period's transactions.
,Committee On Accounting Procedure (CAP) - correct answer ✔✔An organization composed of practicing
CPAs which issued Accounting Research Bulletins dealing with a variety of accounting problems during
the years 1939 to 1959.
Comparability - correct answer ✔✔Ability to compare accounting information of different companies
because they measure and report information in a similar manner.
Completeness - correct answer ✔✔All information necessary for faithful representation is provided.
Conceptual Framework - correct answer ✔✔A coherent system of interrelated objectives and
fundamentals that can lead to consistent standards.
Confirmatory Value - correct answer ✔✔Information that confirms or corrects prior expectations.
Consistency - correct answer ✔✔An entity applies the same accounting treatment to similar events from
period to period.
Contra Asset Account - correct answer ✔✔An account that offsets an asset account on the balance
sheet.
Cost Constraint - correct answer ✔✔The constraint that states that information should be provided only
if the benefits of providing such information outweigh the costs of providing it.
Cost-benefit Relationship - correct answer ✔✔The costs of something weighed against the benefits that
can be derived.
Current Assets - correct answer ✔✔Cash and other assets expected to be converted into cash, sold, or
consumed either in one year or in the operating cycle, whichever is longer.
Current Liabilities - correct answer ✔✔Obligations that are reasonably expected to be liquidated either
through the use of current assets or the creation of other current liabilities within the longer of 1 year or
the operating cycle.
, Current Operating Performance Approach - correct answer ✔✔A concept that states that the net income
figure should show only the regular, recurring earnings of the business.
Depreciation - correct answer ✔✔The process of allocating the cost of an asset to expense over its
useful life in a rational and systematic manner.
Discontinued Operation - correct answer ✔✔The disposal of a component of a business or the
elimination of a component that represents a strategic shift.
Earnings Management - correct answer ✔✔The planned timing of revenues, expenses, gains, and losses.
Earnings Per Share - correct answer ✔✔The net income earned by each share of outstanding common
stock.
Economic Entity Assumption - correct answer ✔✔An assumption that states economic activity can be
identified with a particular unit of accountability.
Expense Recognition Principle - correct answer ✔✔The recognition of expenses is related to revenues;
"Let the expense follow the revenue."
Fair Value - correct answer ✔✔Defined as "the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date."
Fair Value Principle - correct answer ✔✔Defined as "the amount for which an asset could be exchanged,
a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing
parties in an arm's length transaction."
Faithful Representation - correct answer ✔✔The numbers and descriptions represent what really existed
or happened.
