WGU C213 Chapter 4: Income
Statements questions and answers
Accrual Accounting - correct answer The process that accountants use in adjusting raw transaction data
into refined measures of a firm's economic performance.
Comprehensive Income - correct answer The number used to reflect an overall measure of the change in
a company's wealth during the period
Cost of Goods Sold - correct answer When a business sells goods to customers, the cost of the goods
sold is recorded as an expense
Discontinued Operations - correct answer Report the Hughes results in a separate category called
income from discontinued operations.
Earnings Per Share (EPS) - correct answer The amount of net income associated with each share of
stock.
Economic Value Added - correct answer A system of earnings-based compensation
Expanded Accounting Equation - correct answer Assets = Liabilities + Paid-in Capital + (Revenues -
Expenses - Dividends)
Expenses - correct answer The value of resources used in generating the reported revenue.
Extraordinary Items - correct answer Gains and losses that result from transactions that are both
unusual in nature and infrequent in occurrence
Financial Capital Maintenance - correct answer The approach that accountants typically use in
computing a company's income is the first option described above in which inflation is ignored and a
company is said to have income when its financial resources increase.
Statements questions and answers
Accrual Accounting - correct answer The process that accountants use in adjusting raw transaction data
into refined measures of a firm's economic performance.
Comprehensive Income - correct answer The number used to reflect an overall measure of the change in
a company's wealth during the period
Cost of Goods Sold - correct answer When a business sells goods to customers, the cost of the goods
sold is recorded as an expense
Discontinued Operations - correct answer Report the Hughes results in a separate category called
income from discontinued operations.
Earnings Per Share (EPS) - correct answer The amount of net income associated with each share of
stock.
Economic Value Added - correct answer A system of earnings-based compensation
Expanded Accounting Equation - correct answer Assets = Liabilities + Paid-in Capital + (Revenues -
Expenses - Dividends)
Expenses - correct answer The value of resources used in generating the reported revenue.
Extraordinary Items - correct answer Gains and losses that result from transactions that are both
unusual in nature and infrequent in occurrence
Financial Capital Maintenance - correct answer The approach that accountants typically use in
computing a company's income is the first option described above in which inflation is ignored and a
company is said to have income when its financial resources increase.
