WGU C213 PA & OA Study Guide Brand New Questions Included A+++.

WGU C213 PA & OA Study Guide 2022/2023 1. Which of the following is the most correct definition of accounting(answer) A system for providing quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions 2. What is NOT typically true of accounting information(answer) The information relates to future time periods. 3. Which is NOT a key component of the definition of accounting(answer) Qualitative 4. What is true about the double-entry system of bookkeeping(answer) It was devel- oped in the 1300s 1400s in Italy. 5. Businesses use accounting systems to: Analyze transactions; Handle rou- tine bookkeeping tasks; Evaluate performance and health of the business. 6. What is not a function of accounting(answer) Executing sales transactions for organizations 7. What is NOT one of the three primary financial statements(answer) Statement of retained earnings 8. Generally accepted accounting principles are: Developed by accounting rule makers 9. The initials GAAP stand for: Generally Accepted Accounting Principles 10. The current standard-setting board for accounting in the private sector is the: Financial Accounting Standards Board (FASB) 11. Which of the following organizations has specific legal authority to es- tablish accounting standards for publicly held companies(answer) Securities and Exchange Commission (SEC) 12. Which is NOT a service typically provided by large public accounting firms(answer) Making management decisions 13. The organization that develops worldwide accounting standards is the: - International Accounting Standards Board (IASB) 14. The initials CPA stand for: Certified Public Accountant 15. Which of the following financial statements reports a company's re- sources, obligations, and owner's equity(answer) Balance sheet 16. Which of the following financial statements reports the excess of a company's revenues over its expenses(answer) Income statement 17. Which of the following financial statements reports the amount of cash collected and paid out by a company(answer) Statement of cash flows 18. The emphasis in financial accounting is on which of the following exter- nal user groups(answer) Investors and creditors 19. The primary internal group that uses accounting information is: Manage- ment 20. Internal reports are generally used by: Management 21. Which of the following is NOT an external user of financial information?- : Management 22. Which of the following is NOT true of the Financial Accounting Standards Board (FASB)(answer) It is a government agency 23. Which of the following is NOT a service typically provided by large public accounting firms(answer) Making management decisions 24. Standards established by the International Accounting Standards Board are referred to as: International Financial Accounting Standards 25. Which of the following is NOT a reason for the integration of worldwide accounting standards(answer) the theoretical necessity of a common set of accounting standards 26. The International Accounting Standards Board (IASB) is charged with developing worldwide accounting practices: True 27. With the current state of information technology, investors outside a com- pany are now allowed access to a company's internal database of financial information and do their own customized analysis of a firm's performance.- : False 28. Increased federal oversight of the audit process resulted from the pas- sage of the following act of Congress: Sarbanes-Oxley Act 29. Steps in the decision cycle from first (1) to last (5): Prepare financial statements Analyze financial statements Gather information Make decision Implement decision 30. What is the price-earnings (PE) ratio for this company? Partial financial information for a company is as follows: Current assets $36,543 Total assets $58,719 Current liabilities $24,824   Total liabilities $48,561 Stockholders' equity $10,158 Sales $46,997 Net Income $ 3,761 Market value of shares $41,316: 11.0 31. What does it mean if a company has a debt ratio of 101.5%(answer) The company has 1.5% more total liabilities than total assets. 32. What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the same(answer) Continual decrease in sales 33. Which two cash flow adequacy ratios represent a cash cow(answer) - $6,991/$5,486 & $5,220/$1,875 34. What two items of information are revealed on the balance sheet(answer) Own- ership & Debt 35. Which term is defined as the residual interest in the net assets of a company(answer) Owners' equity 36. A corporation has total liabilities of $300 million, total owners' equity of $100 million, and current assets of $50 million. What is the value of the firm's long-term assets(answer) $350 million 37. Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting(answer) In 2014, a company provides services to a customer for which cash will be collected the next year (2015). 38. Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company(answer) Cash flows from financing activities 39. Cash flows from financing activities: In the notes to financial statements 40. Which assurance does an external audit report provide for its readers?- : The company's financial statements fairly reflect its financial position 41. Information that can be verified: Reliable 42. Information having to do with the matter at hand: Relevant 43. Information that is important enough to make a difference: Material 44. Information related to recognizing losses as they occur: Conservatism 45. Which form of debt should be reported in the long-term liability catego- ry: Notes payable expected to be paid in 18 months 46. What will be the impact of the January 5 event on the company's balance sheet on that date given the following: January 5 The corporation purchased equipment to be used in the business for $200,000 cash.: Equipment will increase $200,000, and cash will decrease $200,000. 47. Which two values affect the measurement of net income: Operating ex- penses & Ordinary gains and losses 48. Which two items' subtotals are included in a multi-step income statement- : Gross profit & Income from operations 49. Given the following, which month should advertising costs be expensed by a company using accural based accounting: The furniture company paid $3,000 for advertising that ran in the local newspaper in November 2011.: - November 2011 50. How much insurance expense should a company using accrual based accounting have recognized for the year ending in 2011 given the following: Purchased equipment costing $500,000; useful life five year; purchased a one-year insurance poli