WGC C213 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Current Ratio
Answer: Current Assets/Current Liabilities. Only need a balance sheet.
●● Return on Sales
Answer: Net Income/Sales. Only need income statement
●● Asset Turnover
Answer: Sales/Total Assets
●● Return on Equity
Answer: Net Income/Stockholder's equity. Balance and Income
Statements used.
●● Price-Earnings Ratio (PE)
Answer: Market Value fo Shares/Net Income
●● Accounting is
, Answer: the recording of the day-to-day financial activities of a
company and the organization of that information into summary reports
used to evaluate the company's financial status.
●● Bookeeping is
Answer: the preservation of a systematic, quantitative record of an
activity. Without bookkeeping, good business is impossible. An
accounting system is used by a business to handle routine bookkeeping
tasks and to structure the information so it can be used to evaluate the
performance and financial status of the business. Accounting
information is intended to be useful in making decisions about the
future.
●● The focus of financial accounting is
Answer: the three primary financial statements: the balance sheet, the
income statement, and the statement of cash flows.
●● Financial accounting information is
Answer: provided for, and used by, external users. Managerial
accounting is the name given to accounting systems designed for
internal users. The information provided by financial accounting is
summarized in the financial statements:
The balance sheet reports a company's assets, liabilities, and owners'
equity.
AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Current Ratio
Answer: Current Assets/Current Liabilities. Only need a balance sheet.
●● Return on Sales
Answer: Net Income/Sales. Only need income statement
●● Asset Turnover
Answer: Sales/Total Assets
●● Return on Equity
Answer: Net Income/Stockholder's equity. Balance and Income
Statements used.
●● Price-Earnings Ratio (PE)
Answer: Market Value fo Shares/Net Income
●● Accounting is
, Answer: the recording of the day-to-day financial activities of a
company and the organization of that information into summary reports
used to evaluate the company's financial status.
●● Bookeeping is
Answer: the preservation of a systematic, quantitative record of an
activity. Without bookkeeping, good business is impossible. An
accounting system is used by a business to handle routine bookkeeping
tasks and to structure the information so it can be used to evaluate the
performance and financial status of the business. Accounting
information is intended to be useful in making decisions about the
future.
●● The focus of financial accounting is
Answer: the three primary financial statements: the balance sheet, the
income statement, and the statement of cash flows.
●● Financial accounting information is
Answer: provided for, and used by, external users. Managerial
accounting is the name given to accounting systems designed for
internal users. The information provided by financial accounting is
summarized in the financial statements:
The balance sheet reports a company's assets, liabilities, and owners'
equity.
