WGU C213 Topics 1-6 – Actual
Questions & Answers 100% Guarantee
Pass
1. When cash is collected from customers who had previously purchased a product
or service on account, which accounts are affected?
A. Cash is decreased and Accounts Receivable is increased
B. Cash is increased and Accounts Receivable is decreased
C. Cash is increased and Accounts Payable is decreased
D. Both Cash and Accounts Receivable are increased
ANSWER: B. Cash is increased and Accounts Receivable is decreased
2. Which of the following is NOT considered to be an expense of doing business?
A. Salaries and wages
B. Cash dividends
C. Rent expense
D. Utilities expense
ANSWER: B. Cash dividends
3. The following data were taken from the records of Moss Corporation for the year
ending December 31, 2012:
01/01/12
Assets = $11,250
Liabilities = $8,580
Owners' equity = ?
12/31/12
Assets = ?
Liabilities = $10,365
Owners' equity = $6,465
Given the above information, assets on December 31, 2012, were:
A. $18,060
B. $11,250
C. $5,025
D. $16,830
ANSWER: D. $16,830
(Breakdown: Assets = Liabilities + Owners' equity = $10,365 + $6,465 = $16,830)
4. 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 or False?
,A. True
B. False
ANSWER: A. True
5. A company's asset mix is determined by:
A. Adding all asset values together
B. Dividing each asset item on the balance sheet by total assets
C. Comparing assets to liabilities
D. Subtracting current assets from total assets
ANSWER: B. Dividing each asset item on the balance sheet by total assets
6. A company's asset mix is strongly influenced by:
A. The company's management
B. The company's industry
C. The company's size
D. The company's profitability
ANSWER: B. The company's industry
7. A loss from the sale of a building would be reported on an indirect method
statement of cash flows as:
A. A deduction from net income
B. An addition to net income
C. An investing activity
D. A separate line item in operating activities
ANSWER: B. An addition to net income
8. A measure of a company's performance that includes all items that are expected
to continue into the future is:
A. Net income
B. Income from Continuing Operations
C. Comprehensive income
D. Operating income
ANSWER: B. Income from Continuing Operations
9. A wholesale bakery would normally recognize revenue when:
A. An order is received from the customer
B. Goods are delivered to the customer
C. Cash is collected from the customer
D. An invoice is prepared
ANSWER: B. Goods are delivered to the customer
10. An example of direct matching of an expense with revenues would be:
A. Salaries for administrative staff
B. Direct labor costs incurred to produce inventory sold during a period
, C. Advertising expenses
D. Rent expense for the facility
ANSWER: B. Direct labor costs incurred to produce inventory sold during a period
11. An independent audit report is usually issued by:
A. The company's management
B. The company's board of directors
C. A certified public accountant
D. The Internal Revenue Service
ANSWER: C. A certified public accountant
12. Analysis of revenue and expense transactions requires the use of the:
A. Basic Accounting Equation
B. Expanded Accounting Equation
C. Simple Income Equation
D. Cash Flow Equation
ANSWER: B. Expanded Accounting Equation
13. Another name for the income statement is:
A. Balance sheet
B. Statement of earnings
C. Statement of cash flows
D. Statement of financial position
ANSWER: B. Statement of earnings
14. Avondale Inc. had the following cash transactions during 2012:
Sales receipts = $2,000,000
Inventory payments = $1,500,000
Interest payments = $20,000
Wage payments = $120,000
Dividend receipts = $10,000
Interest receipts = $6,000
Equipment purchased = $150,000
Stock of Canton Company purchased = $50,000
Stock issued = $300,000
Repaid a note (non-operating) = $100,000
What was Avondale's total net increase in cash for the year provided by (used in)
financing activities?
A. $150,000
B. $100,000
C. $200,000
D. $300,000
ANSWER: C. $200,000
(Breakdown: Stock issued $300,000 - Repaid a note $100,000 = $200,000)
Questions & Answers 100% Guarantee
Pass
1. When cash is collected from customers who had previously purchased a product
or service on account, which accounts are affected?
A. Cash is decreased and Accounts Receivable is increased
B. Cash is increased and Accounts Receivable is decreased
C. Cash is increased and Accounts Payable is decreased
D. Both Cash and Accounts Receivable are increased
ANSWER: B. Cash is increased and Accounts Receivable is decreased
2. Which of the following is NOT considered to be an expense of doing business?
A. Salaries and wages
B. Cash dividends
C. Rent expense
D. Utilities expense
ANSWER: B. Cash dividends
3. The following data were taken from the records of Moss Corporation for the year
ending December 31, 2012:
01/01/12
Assets = $11,250
Liabilities = $8,580
Owners' equity = ?
12/31/12
Assets = ?
Liabilities = $10,365
Owners' equity = $6,465
Given the above information, assets on December 31, 2012, were:
A. $18,060
B. $11,250
C. $5,025
D. $16,830
ANSWER: D. $16,830
(Breakdown: Assets = Liabilities + Owners' equity = $10,365 + $6,465 = $16,830)
4. 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 or False?
,A. True
B. False
ANSWER: A. True
5. A company's asset mix is determined by:
A. Adding all asset values together
B. Dividing each asset item on the balance sheet by total assets
C. Comparing assets to liabilities
D. Subtracting current assets from total assets
ANSWER: B. Dividing each asset item on the balance sheet by total assets
6. A company's asset mix is strongly influenced by:
A. The company's management
B. The company's industry
C. The company's size
D. The company's profitability
ANSWER: B. The company's industry
7. A loss from the sale of a building would be reported on an indirect method
statement of cash flows as:
A. A deduction from net income
B. An addition to net income
C. An investing activity
D. A separate line item in operating activities
ANSWER: B. An addition to net income
8. A measure of a company's performance that includes all items that are expected
to continue into the future is:
A. Net income
B. Income from Continuing Operations
C. Comprehensive income
D. Operating income
ANSWER: B. Income from Continuing Operations
9. A wholesale bakery would normally recognize revenue when:
A. An order is received from the customer
B. Goods are delivered to the customer
C. Cash is collected from the customer
D. An invoice is prepared
ANSWER: B. Goods are delivered to the customer
10. An example of direct matching of an expense with revenues would be:
A. Salaries for administrative staff
B. Direct labor costs incurred to produce inventory sold during a period
, C. Advertising expenses
D. Rent expense for the facility
ANSWER: B. Direct labor costs incurred to produce inventory sold during a period
11. An independent audit report is usually issued by:
A. The company's management
B. The company's board of directors
C. A certified public accountant
D. The Internal Revenue Service
ANSWER: C. A certified public accountant
12. Analysis of revenue and expense transactions requires the use of the:
A. Basic Accounting Equation
B. Expanded Accounting Equation
C. Simple Income Equation
D. Cash Flow Equation
ANSWER: B. Expanded Accounting Equation
13. Another name for the income statement is:
A. Balance sheet
B. Statement of earnings
C. Statement of cash flows
D. Statement of financial position
ANSWER: B. Statement of earnings
14. Avondale Inc. had the following cash transactions during 2012:
Sales receipts = $2,000,000
Inventory payments = $1,500,000
Interest payments = $20,000
Wage payments = $120,000
Dividend receipts = $10,000
Interest receipts = $6,000
Equipment purchased = $150,000
Stock of Canton Company purchased = $50,000
Stock issued = $300,000
Repaid a note (non-operating) = $100,000
What was Avondale's total net increase in cash for the year provided by (used in)
financing activities?
A. $150,000
B. $100,000
C. $200,000
D. $300,000
ANSWER: C. $200,000
(Breakdown: Stock issued $300,000 - Repaid a note $100,000 = $200,000)
