WGU C213 OA EXAM
1. The ability a company has to pay its debts in the short run is its
Correct Answer: Liquidity
2. Which of the following is a measure of the liquid position of a corporation?
Correct Answer: Debt ratio
3. Which of the following ratios is used to measure a firm's leverage?
Correct Answer: Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm?
Correct Answer: Return on Equity
5. The emphasis in financial accounting is on which of the following external
user groups?
Correct Answer: Investors and creditors
6. The primary internal group that uses accounting information
Correct Answer: Management
7. Internal reports are generally used by
Correct Answer: Management
8. Which of the following is NOT an external user of financial information?
Correct Answer: -Management
9. Which of the following is NOT true of the Financial Accounting Standards
Board (FASB)?
Correct Answer: It is a government agency
,10. Generally accepted accounting principles are
Correct Answer: Developed by accounting rule makers
11. The initials GAAP stand for
Correct Answer: Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private sector is the
Correct Answer: Financial Accounting Standards Board (FASB)
13. The organization that develops worldwide accounting standards is the
Correct Answer: International Accounting Standards Board (IASB)
14. The initials CPA stand for
Correct Answer: Certified Public Accountant
15. Which of the following is NOT a service typically provided by large public
accounting firms?
Correct Answer: Making management decisions
16. Standards established by the International Accounting Standards Board
are referred to as
Correct Answer: 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?
Correct Answer: Internal Revenue Service
18. Which of the following is NOT a reason for the integration of worldwide
accounting standards?
, Correct Answer: the theoretical necessity of a common set of accounting
standards
19. The International Accounting Standards Board (IASB) is charged with
developing worldwide accounting practices?
Correct Answer: True
20. 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.
Correct Answer: - False
21. Increased federal oversight of the audit process resulted from the passage
of the following act of Congress –
Correct Answer: 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.
Correct Answer: True
23. Which of the following is NOT one of the three primary financial statements?
Correct Answer: 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.
Correct Answer: True
25. Which of the following accounts is considered to be the most liquid?
1. The ability a company has to pay its debts in the short run is its
Correct Answer: Liquidity
2. Which of the following is a measure of the liquid position of a corporation?
Correct Answer: Debt ratio
3. Which of the following ratios is used to measure a firm's leverage?
Correct Answer: Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm?
Correct Answer: Return on Equity
5. The emphasis in financial accounting is on which of the following external
user groups?
Correct Answer: Investors and creditors
6. The primary internal group that uses accounting information
Correct Answer: Management
7. Internal reports are generally used by
Correct Answer: Management
8. Which of the following is NOT an external user of financial information?
Correct Answer: -Management
9. Which of the following is NOT true of the Financial Accounting Standards
Board (FASB)?
Correct Answer: It is a government agency
,10. Generally accepted accounting principles are
Correct Answer: Developed by accounting rule makers
11. The initials GAAP stand for
Correct Answer: Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private sector is the
Correct Answer: Financial Accounting Standards Board (FASB)
13. The organization that develops worldwide accounting standards is the
Correct Answer: International Accounting Standards Board (IASB)
14. The initials CPA stand for
Correct Answer: Certified Public Accountant
15. Which of the following is NOT a service typically provided by large public
accounting firms?
Correct Answer: Making management decisions
16. Standards established by the International Accounting Standards Board
are referred to as
Correct Answer: 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?
Correct Answer: Internal Revenue Service
18. Which of the following is NOT a reason for the integration of worldwide
accounting standards?
, Correct Answer: the theoretical necessity of a common set of accounting
standards
19. The International Accounting Standards Board (IASB) is charged with
developing worldwide accounting practices?
Correct Answer: True
20. 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.
Correct Answer: - False
21. Increased federal oversight of the audit process resulted from the passage
of the following act of Congress –
Correct Answer: 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.
Correct Answer: True
23. Which of the following is NOT one of the three primary financial statements?
Correct Answer: 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.
Correct Answer: True
25. Which of the following accounts is considered to be the most liquid?
