C213 WGU OA PREP STUDY GUIDE|| ACTUAL QUESTIONS AND
CORRECT DETAILED ANSWERS|| GRADED A+ 2025 UPDATE
1. The ability a company has to pay its debts in the short run is its ANS
Liquidity
2. Which of the following is a measure of the liquid position of a corporation?-
ANS Debt ratio
3. Which of the following ratios is used to measure a firm's leverage? ANS
Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm? ANS Return on Equity
5. The emphasis in financial accounting is on which of the following external
user groups? ANS Investors and creditors
6. The primary internal group that uses accounting information is ANS
Manage- ment
7. Internal reports are generally used by ANS Management
8. Which of the following is NOT an external user of financial information? AN
-
,Management
9. Which of the following is NOT true of the Financial Accounting Standards
Board (FASB)? ANS It is a government agency
10. Generally accepted accounting principles are ANS Developed by
accounting rule makers
11. The initials GAAP stand for ANS Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private sector is
the ANS Financial Accounting Standards Board (FASB)
13. The organization that develops worldwide accounting standards is the
ANS In- ternational Accounting Standards Board (IASB)
14. The initials CPA stand for ANS Certified Public Accountant
15. Which of the following is NOT a service typically provided by large public
accounting firms? ANS Making management decisions
16. Standards established by the International Accounting Standards Board
are referred to as ANS International Financial Reporting Standards
17. Which of the following is the government agency that stipulates the rules
and regulations that govern the collection of taxes in the United States?
ANS In- ternal Revenue Service
18. Which of the following is NOT a reason for the integration of worldwide
accounting standards? ANS the theoretical necessity of a common set of
accounting standards
19. The International Accounting Standards Board (IASB) is charged with
developing worldwide accounting practices? ANS True
20. With the current state of information technology, investors outside a com-
pany are now allowed access to a company's internal database of financial
, information and do their own customized analysis of a firm's performance.
ANS -
False
21. Increased federal oversight of the audit process resulted from the passage
of the following act of Congress - ANS Sarbanes-Oxley Act
22. A borrower benefits from providing financial information regarding income
and expenses in the form of a lower interest rate on the loan because of
reduced uncertainty for the lender with regard to repayment. ANS True
23. Which of the following is NOT one of the three primary financial state-
ments? ANS The Statement of Retained Earnings
24. One reason for a company's preparing and providing financial statements
is to reduce uncertainty for an investor regarding the firm's future financial
performance. ANS True
25. Which of the following accounts is considered to be the most liquid? ANS
Cash
26. Which of the following types of accounts are NOT found on the balance
sheet? ANS Revenues
27. The financial statement that reports resources owned, the obligations
to transfer resources to other organizations, and the claims by the entity's
owners is known as the ANS Balance sheet
28. The idea that the activities of the entity are to be separated from those of
the individual owner is the ANS Separate entity concept
29. The basic accounting equation is ANS Assets = Liabilities + Owners' Equity
30. Which of the following would be included on an income statement? ANS
Rent expense
3 H/ H24
CORRECT DETAILED ANSWERS|| GRADED A+ 2025 UPDATE
1. The ability a company has to pay its debts in the short run is its ANS
Liquidity
2. Which of the following is a measure of the liquid position of a corporation?-
ANS Debt ratio
3. Which of the following ratios is used to measure a firm's leverage? ANS
Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm? ANS Return on Equity
5. The emphasis in financial accounting is on which of the following external
user groups? ANS Investors and creditors
6. The primary internal group that uses accounting information is ANS
Manage- ment
7. Internal reports are generally used by ANS Management
8. Which of the following is NOT an external user of financial information? AN
-
,Management
9. Which of the following is NOT true of the Financial Accounting Standards
Board (FASB)? ANS It is a government agency
10. Generally accepted accounting principles are ANS Developed by
accounting rule makers
11. The initials GAAP stand for ANS Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private sector is
the ANS Financial Accounting Standards Board (FASB)
13. The organization that develops worldwide accounting standards is the
ANS In- ternational Accounting Standards Board (IASB)
14. The initials CPA stand for ANS Certified Public Accountant
15. Which of the following is NOT a service typically provided by large public
accounting firms? ANS Making management decisions
16. Standards established by the International Accounting Standards Board
are referred to as ANS International Financial Reporting Standards
17. Which of the following is the government agency that stipulates the rules
and regulations that govern the collection of taxes in the United States?
ANS In- ternal Revenue Service
18. Which of the following is NOT a reason for the integration of worldwide
accounting standards? ANS the theoretical necessity of a common set of
accounting standards
19. The International Accounting Standards Board (IASB) is charged with
developing worldwide accounting practices? ANS True
20. With the current state of information technology, investors outside a com-
pany are now allowed access to a company's internal database of financial
, information and do their own customized analysis of a firm's performance.
ANS -
False
21. Increased federal oversight of the audit process resulted from the passage
of the following act of Congress - ANS Sarbanes-Oxley Act
22. A borrower benefits from providing financial information regarding income
and expenses in the form of a lower interest rate on the loan because of
reduced uncertainty for the lender with regard to repayment. ANS True
23. Which of the following is NOT one of the three primary financial state-
ments? ANS The Statement of Retained Earnings
24. One reason for a company's preparing and providing financial statements
is to reduce uncertainty for an investor regarding the firm's future financial
performance. ANS True
25. Which of the following accounts is considered to be the most liquid? ANS
Cash
26. Which of the following types of accounts are NOT found on the balance
sheet? ANS Revenues
27. The financial statement that reports resources owned, the obligations
to transfer resources to other organizations, and the claims by the entity's
owners is known as the ANS Balance sheet
28. The idea that the activities of the entity are to be separated from those of
the individual owner is the ANS Separate entity concept
29. The basic accounting equation is ANS Assets = Liabilities + Owners' Equity
30. Which of the following would be included on an income statement? ANS
Rent expense
3 H/ H24
