WGU C213 Accounting for Decision Makers Final Exam Questions and Answers Study Guide

WGU C213 Final Exam study
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1. Order of assets listed on the balance sheet: Assets are listed in the order
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of liquidity. Liquidity is the amount of time it would usually take to covert a
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n asset into c
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ash. Obviously, cash would be listed first, followed by marketable investm
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ents (a com pany can quickly convert a short-
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term investment into cash). Accounts receivable would be listed next follo
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wed by inve ntory, and long-
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term investments, fixed assets, and intangibles.
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Current assets are listed before long-term assets.
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Current liabilities are listed before long-
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term liabilities, but there is no specific order they are listed in outside of cu
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rrent and lo ng-term.
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There is also no specific order equity accounts are listed on the balance sh
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eet; althou gh, typically you will see paid-in-
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capital followed by retained earnings followed by accumulated other com
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prehensive i ncome, and lastly, treasury stock.
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2. Difference between a manufacturing company and a service company.
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,Period Costs Product Costs
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1

, Service Co. Selling Costs Direct Labor Administrative
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g Costs Service Overhead
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Manufacturing Co Selling Costs Direct Labor Administrative g g g g g g




g Costs Manufacturing Overhead
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Direct Materials (inventory: The only difference is -
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g a manufacturing company has direct materials (inv
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entory).
3. Evaluating a historical income statement to project a future income state-
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g ment.


Projected growth for 2017 = 10% increase over 2016 sales.
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Step 1: Convert the income statement into a common-
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asted 2017 g g

sized incom Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the
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forec
sales. Then multiply the projected 2017 sales by the percentages from step 1.
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N
ow, what would you do if you were given the 2017 sales figure and you need to
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c alculate the 2016 sales figure based off the 10% growth for 2017?: Calcu-
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g lation for 2016: 110,.10 = 100,000
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4. Role of the U. S. Securities and Exchange Commission (SEC) in financial r
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eporting.: Regulates the U.S. Stock exchanges.
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Seeks to create a fair information environment in which investors can buy and
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sell sto g




cks.

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