WGU C213 Accounting for Decision Makers Study Guide Questions and Answers

WGU C213 Accounting for Decision
Makers
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1. Accounting: the recording of the day-to-
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day financial activities of a company
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and the organization of that information into summary reports used to eva
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luate the c ompany's financial status
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2.
Bookkeeping: the preservation of a systematic, quantitative record of an a
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ctivity 3.
accounting system: used by a business to handle routine bookkeeping task
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s an
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d to structure the information so it can be used to evaluate the performanc
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e and finan cial status of the business
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4.
Accounting information: Info that is intended to be useful in making decisio
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ns a bout the future.
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5.
The balance sheet, the income statement, and the statement of cashflows-:
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What are the three primary financial statements?
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,6.
External Users: Who is financial accounting information primarily prepare
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d for a nd used by?
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7.
Managerial Accounting: the name given to accounting systems designe
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d for i nternal users
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8.
Balance Sheet: Reports a company's assets, liabilities, and owners' equi
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ty 9.
Income Statement: reports the amount of net income earned by a compa
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ny d uring a period
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10. Net income: the excess of a company's revenues over its expenses
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1

, 11.
statement of cash flows: reports the amount of cash collected and paid out by a
mpany in the following three types of activities: operating, investing, a
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nd financing 12. g




FASB: Which private body establishes accounting rules in the U.S.?
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13.
Financial Accounting Standards Board (FASB): a private body established an
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d supported by the joint efforts of the U.S. business community, financial an
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alysts, and practicing accountants g g g




14.
The Securities and Exchange Commission (SEC): the organization that reg-
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g ulates U.S. stock exchanges and seeks to create a fair information environ
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ment in w g g




hich investors can buy and sell stocks without fear that companies are hidin
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g or mani pulating financial data
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15.
American Institute of Certified Public Accountants (AICPA): the professional o
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rganization of certified public accountants (CPAs) in the United States
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16.
Public Company Accounting Oversight Board (PCAOB): the organization tha
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t inspects the audit practices of registered audit firms and has statutory aut
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hority to inv g g




estigate questionable audit practices and to impose sanctions such as barri
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ng an audi t firm from auditing SEC-registered companies
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17.
Internal Revenue Service (IRS): Gov't agency that establishes rules to define
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e