C213 Accounting for Decision Makers-2
WGU questions and answers
Understanding of a business increases as one associates the individual asset, liability, and equity
accounts with the underlying business activities that give rise to them. T/F - correct answer True
Assets and liabilities are generally classified as _______________ or _________ __________. - correct
answer current or long term.
Current Asset - correct answer one that is expected to be used within one year of the balance sheet
date.
Long term assets include - correct answer property, plant and equipment, investments in other
companies, and bonds or notes receivable
Current Liabilities - correct answer liabilities due within a short time, usually within a year
long-term debt - correct answer a liability that falls due beyond one year from the date of the financial
statements
Companies can issue what two kinds of stock? - correct answer common and preferred
Common stockholders are the true owners of a business. T/F - correct answer True
Preferred stockholders give up some of the rights of ownership enjoyed by common stockholders in
exchange for some of the safety promised to creditors. T/F - correct answer True
Companies usually provide balance sheets for at least __________ years, with the statements shown in
comparative, side-by-side format. - correct answer Two
The first item in a U.S. balance sheet is usually __________. - correct answer Cash
,The first item in a NON-U.S. countries balance sheet is usually ________________________. - correct
answer Long term assets
The order of presentation in a standard balance sheet is? - correct answer current assets, long-term
assets, current liabilities, long-term liabilities, and stockholders' equity
What is the difference between current assets and liabilities called? - correct answer Working capital
Recognition - correct answer the process of condensing all estimates and judgments into one number
and reporting that one number in the formal financial statements.
Disclosure - correct answer describing details in a narrative note.
____________________ is the preferred method of reporting financial information. - correct answer
Recognition
Individual transactions impacting balance sheets can be analyzed by remembering that the accounting
equation (_________=__________ + ___________) is always maintained. - correct answer Assets =
Liabilities + Owners' Equity
Transaction analysis - correct answer the process of determining how an economic event impacts
financial statements.
The discipline imposed by the mathematical necessity of maintaining the accounting equation helps to
ensure that all dimensions of the impact of an event on financial statements have been considered. T/F -
correct answer True
Transaction analysis is NOT a useful exercise in critically and systematically analyzing the impact of
business events on a company's reported financial performance and position. T/F - correct answer False.
Transaction is very useful
, Asset Mix - correct answer The proportion of total assets in each asset category, is determined to a large
degree by the industry in which the company operates.
Net Income - correct answer The amount by which revenues exceed expenses.
The primary categories of income statement items are - correct answer revenues, expenses, gains, and
losses.
Income statement items that do not relate to a company's continuing operations are - correct answer
income from discontinued operations and extraordinary items.
Individual transactions impacting income can be analyzed using the expanded accounting equation,
which is: - correct answer Assets = Liabilities + Paid-in Capital + (Revenues - Expenses - Dividends)
An important use of an income statement is to - correct answer forecast income in future periods.
Good forecasting requires an understanding of - correct answer what underlying factors determine the
level of a revenue or an expense.
Accrual accounting - correct answer the process that accountants use in adjusting raw transaction data
into refined measures of a firm's economic performance.
One of the important economic contributions made by accountants is the collection of accrual
accounting rules which, when applied to a company's raw cash flow data,
_________________________________________________________. - correct answer result in a
superior measure of that company's economic performance
What is income? - correct answer the increase in an individual's or a company's wealth during a period,
or simply money earned
Gross Profit Equation - correct answer Net Sales - COGS = Gross Profit
WGU questions and answers
Understanding of a business increases as one associates the individual asset, liability, and equity
accounts with the underlying business activities that give rise to them. T/F - correct answer True
Assets and liabilities are generally classified as _______________ or _________ __________. - correct
answer current or long term.
Current Asset - correct answer one that is expected to be used within one year of the balance sheet
date.
Long term assets include - correct answer property, plant and equipment, investments in other
companies, and bonds or notes receivable
Current Liabilities - correct answer liabilities due within a short time, usually within a year
long-term debt - correct answer a liability that falls due beyond one year from the date of the financial
statements
Companies can issue what two kinds of stock? - correct answer common and preferred
Common stockholders are the true owners of a business. T/F - correct answer True
Preferred stockholders give up some of the rights of ownership enjoyed by common stockholders in
exchange for some of the safety promised to creditors. T/F - correct answer True
Companies usually provide balance sheets for at least __________ years, with the statements shown in
comparative, side-by-side format. - correct answer Two
The first item in a U.S. balance sheet is usually __________. - correct answer Cash
,The first item in a NON-U.S. countries balance sheet is usually ________________________. - correct
answer Long term assets
The order of presentation in a standard balance sheet is? - correct answer current assets, long-term
assets, current liabilities, long-term liabilities, and stockholders' equity
What is the difference between current assets and liabilities called? - correct answer Working capital
Recognition - correct answer the process of condensing all estimates and judgments into one number
and reporting that one number in the formal financial statements.
Disclosure - correct answer describing details in a narrative note.
____________________ is the preferred method of reporting financial information. - correct answer
Recognition
Individual transactions impacting balance sheets can be analyzed by remembering that the accounting
equation (_________=__________ + ___________) is always maintained. - correct answer Assets =
Liabilities + Owners' Equity
Transaction analysis - correct answer the process of determining how an economic event impacts
financial statements.
The discipline imposed by the mathematical necessity of maintaining the accounting equation helps to
ensure that all dimensions of the impact of an event on financial statements have been considered. T/F -
correct answer True
Transaction analysis is NOT a useful exercise in critically and systematically analyzing the impact of
business events on a company's reported financial performance and position. T/F - correct answer False.
Transaction is very useful
, Asset Mix - correct answer The proportion of total assets in each asset category, is determined to a large
degree by the industry in which the company operates.
Net Income - correct answer The amount by which revenues exceed expenses.
The primary categories of income statement items are - correct answer revenues, expenses, gains, and
losses.
Income statement items that do not relate to a company's continuing operations are - correct answer
income from discontinued operations and extraordinary items.
Individual transactions impacting income can be analyzed using the expanded accounting equation,
which is: - correct answer Assets = Liabilities + Paid-in Capital + (Revenues - Expenses - Dividends)
An important use of an income statement is to - correct answer forecast income in future periods.
Good forecasting requires an understanding of - correct answer what underlying factors determine the
level of a revenue or an expense.
Accrual accounting - correct answer the process that accountants use in adjusting raw transaction data
into refined measures of a firm's economic performance.
One of the important economic contributions made by accountants is the collection of accrual
accounting rules which, when applied to a company's raw cash flow data,
_________________________________________________________. - correct answer result in a
superior measure of that company's economic performance
What is income? - correct answer the increase in an individual's or a company's wealth during a period,
or simply money earned
Gross Profit Equation - correct answer Net Sales - COGS = Gross Profit
