C213 WGU OA PREP QUESTIONS AND ANSWERS
The ability a company has to pay its debts in the short run is its - Answers - Liquidity
Which of the following is a measure of the liquid position of a corporation? - Answers -
Debt ratio
Which of the following ratios is used to measure a firm's leverage? - Answers - Debt
Ratio
Which of the following ratios is used to measure the profit earned on each dollar
invested in a firm? - Answers - Return on Equity
The emphasis in financial accounting is on which of the following external user groups?
- Answers - Investors and creditors
The primary internal group that uses accounting information is - Answers -
Management
Internal reports are generally used by - Answers - Management
Which of the following is NOT an external user of financial information? - Answers -
Management
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - Answers - It is a government agency
Generally accepted accounting principles are - Answers - Developed by accounting
rule makers
The initials GAAP stand for - Answers - Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the - Answers
- Financial Accounting Standards Board (FASB)
The organization that develops worldwide accounting standards is the - Answers -
International Accounting Standards Board (IASB)
The initials CPA stand for - Answers - Certified Public Accountant
Which of the following is NOT a service typically provided by large public accounting
firms? - Answers - Making management decisions
Standards established by the International Accounting Standards Board are referred to
as - Answers - International Financial Reporting Standards
, Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - Answers -
Internal Revenue Service
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - Answers - the theoretical necessity of a common set of accounting
standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices? - Answers - True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance. - Answers - False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - - Answers - Sarbanes-Oxley Act
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. - Answers - True
Which of the following is NOT one of the three primary financial statements? - Answers
- The Statement of Retained Earnings
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. - Answers
- True
Which of the following accounts is considered to be the most liquid? - Answers - Cash
Which of the following types of accounts are NOT found on the balance sheet? -
Answers - Revenues
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 -
Answers - Balance sheet
The idea that the activities of the entity are to be separated from those of the individual
owner is the - Answers - Separate entity concept
The basic accounting equation is - Answers - Assets = Liabilities + Owners' Equity
Which of the following would be included on an income statement? - Answers - Rent
expense
The ability a company has to pay its debts in the short run is its - Answers - Liquidity
Which of the following is a measure of the liquid position of a corporation? - Answers -
Debt ratio
Which of the following ratios is used to measure a firm's leverage? - Answers - Debt
Ratio
Which of the following ratios is used to measure the profit earned on each dollar
invested in a firm? - Answers - Return on Equity
The emphasis in financial accounting is on which of the following external user groups?
- Answers - Investors and creditors
The primary internal group that uses accounting information is - Answers -
Management
Internal reports are generally used by - Answers - Management
Which of the following is NOT an external user of financial information? - Answers -
Management
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - Answers - It is a government agency
Generally accepted accounting principles are - Answers - Developed by accounting
rule makers
The initials GAAP stand for - Answers - Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the - Answers
- Financial Accounting Standards Board (FASB)
The organization that develops worldwide accounting standards is the - Answers -
International Accounting Standards Board (IASB)
The initials CPA stand for - Answers - Certified Public Accountant
Which of the following is NOT a service typically provided by large public accounting
firms? - Answers - Making management decisions
Standards established by the International Accounting Standards Board are referred to
as - Answers - International Financial Reporting Standards
, Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - Answers -
Internal Revenue Service
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - Answers - the theoretical necessity of a common set of accounting
standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices? - Answers - True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance. - Answers - False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - - Answers - Sarbanes-Oxley Act
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. - Answers - True
Which of the following is NOT one of the three primary financial statements? - Answers
- The Statement of Retained Earnings
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. - Answers
- True
Which of the following accounts is considered to be the most liquid? - Answers - Cash
Which of the following types of accounts are NOT found on the balance sheet? -
Answers - Revenues
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 -
Answers - Balance sheet
The idea that the activities of the entity are to be separated from those of the individual
owner is the - Answers - Separate entity concept
The basic accounting equation is - Answers - Assets = Liabilities + Owners' Equity
Which of the following would be included on an income statement? - Answers - Rent
expense
