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