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C213 WGU OA Prep Exam with complete solutions
latest version
1. The ability a company has to pay its debts in the short run is its: Liquidity
2. Which of the following is a measure of the liquid position of a corporation?: -
Debt ratio
3. Which of the following ratios is used to measure a firm's leverage?:
Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm?: Return on Equity
5. The emphasis in financial accounting is on which of the following
external user groups?: Investors and creditors
6. The primary internal group that uses accounting information is: Management
7. Internal reports are generally used by: Management
8. Which of the following is NOT an external user of financial information?: Man-
agement
9. Which of the following is NOT true of the Financial Accounting
Standards Board (FASB)?: It is a government agency
10. Generally accepted accounting principles are: Developed by accounting rule makers
11. The initials GAAP stand for: Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private
sector is the: Financial Accounting Standards Board (FASB)
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13. The organization that develops worldwide accounting standards is
the: Inter- national Accounting Standards Board (IASB)
14. The initials CPA stand for: Certified Public Accountant
15. Which of the following is NOT a service typically provided by
large public accounting firms?: Making management decisions
16. Standards established by the International Accounting Standards
Board are referred to as: 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?: Internal
Revenue Service
18. Which of the following is NOT a reason for the integration of
worldwide accounting standards?: the theoretical necessity of a common set of accounting
standards
19. The International Accounting Standards Board (IASB) is charged with devel-
oping worldwide accounting practices?: True
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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.: False
21. Increased federal oversight of the audit process resulted from the
passage of the following act of Congress -: 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.: True
23. Which of the following is NOT one of the three primary financial
statements?-
: 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.: True
25. Which of the following accounts is considered to be the most liquid?: Cash
26. Which of the following types of accounts are NOT found on the balance
sheet?: 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: Balance sheet
28. The idea that the activities of the entity are to be separated from
those of the individual owner is the: Separate entity concept
29. The basic accounting equation is: Assets = Liabilities + Owners' Equity
30. Which of the following would be included on an income
statement?: Rent expense
31. Costs that are incurred during the normal operations of a business to gen-
erate revenues are called: Expenses
32. Another name for the income statement is: Statement of earnings
33. Revenues cause: An increase in net assets
34. The financial statement that presents a summary of the revenues and ex-
BRAINSCAPE1
C213 WGU OA Prep Exam with complete solutions
latest version
1. The ability a company has to pay its debts in the short run is its: Liquidity
2. Which of the following is a measure of the liquid position of a corporation?: -
Debt ratio
3. Which of the following ratios is used to measure a firm's leverage?:
Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm?: Return on Equity
5. The emphasis in financial accounting is on which of the following
external user groups?: Investors and creditors
6. The primary internal group that uses accounting information is: Management
7. Internal reports are generally used by: Management
8. Which of the following is NOT an external user of financial information?: Man-
agement
9. Which of the following is NOT true of the Financial Accounting
Standards Board (FASB)?: It is a government agency
10. Generally accepted accounting principles are: Developed by accounting rule makers
11. The initials GAAP stand for: Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private
sector is the: Financial Accounting Standards Board (FASB)
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13. The organization that develops worldwide accounting standards is
the: Inter- national Accounting Standards Board (IASB)
14. The initials CPA stand for: Certified Public Accountant
15. Which of the following is NOT a service typically provided by
large public accounting firms?: Making management decisions
16. Standards established by the International Accounting Standards
Board are referred to as: 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?: Internal
Revenue Service
18. Which of the following is NOT a reason for the integration of
worldwide accounting standards?: the theoretical necessity of a common set of accounting
standards
19. The International Accounting Standards Board (IASB) is charged with devel-
oping worldwide accounting practices?: True
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, BRAINSCAPE1
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.: False
21. Increased federal oversight of the audit process resulted from the
passage of the following act of Congress -: 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.: True
23. Which of the following is NOT one of the three primary financial
statements?-
: 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.: True
25. Which of the following accounts is considered to be the most liquid?: Cash
26. Which of the following types of accounts are NOT found on the balance
sheet?: 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: Balance sheet
28. The idea that the activities of the entity are to be separated from
those of the individual owner is the: Separate entity concept
29. The basic accounting equation is: Assets = Liabilities + Owners' Equity
30. Which of the following would be included on an income
statement?: Rent expense
31. Costs that are incurred during the normal operations of a business to gen-
erate revenues are called: Expenses
32. Another name for the income statement is: Statement of earnings
33. Revenues cause: An increase in net assets
34. The financial statement that presents a summary of the revenues and ex-
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