WGC C213 Final Exam Accounting For Decision Makers Questions and ASnswers 2023 (Verified Answers)

WGC C213 Final Exam Accounting For Decision Makers Questions and ASnswers 2023 (Verified Answers) C213 Final Accounting Exam 2022/2023 1. Which of the following activities would internal auditors NOT typically perform in a large company?: Detect fraud Evaluate internal controls *Prepare the primary financial statements Assist with increasing the efficiency of operation 2. Correct Answer: $3,800 Beginning cash balance: x + $309,800 - $118,000 - $190,000 = $5,600 x = $3,800: The following financial information is available for the year 2012: Operating activities $ 309,800 Investing activities ($118,000) Financing activities ($190,000) Ending cash balance $ 5,600 Given this information, what is the beginning cash balance? 3. Net Income: What is typically viewed as the fundamental measure of a compa- ny's profitability, but there are also a variety of other measures of "income." The best measure of sustainable profitability is income from continuing operations. 4. What are the three primary categories of an Income Statement?: The pri- mary categories of income statement items are revenues, expenses, gains, and losses. 5. Income from continuing operations and extraordinary items: Income state- ment items that do not relate to a company's continuing operations are income from what? 6. Multi-step Income Statement: When revenue and expense items are arranged to highlight important profit relationships, the resulting income statement format is called a? 7. The Matching Concept: Revenue should be recognized when value has been delivered to customers which is typically only after the required work has been performed and after the collection of cash is reasonably assured. What method is used to decide when to recognize expenses? 8. Assets = Liabilities + Paid-in Capital + (Revenues - Expenses - Dividends)- : Individual transactions impacting income can be analyzed using the expanded accounting equation, which is: 9. Forecast income for future periods.: What is an important use of an income statement? It requires an understanding of what underlying factors determine the level of a revenue or an expense. 10. Accrual Accounting: What is the process that accountants use in adjusting raw transaction data into refined measures of a firm's economic performance? 11. Financial Capital Maintenance: A concept that states that income exists when the dollar amount of a company's net assets (assets - liabilities, or owners' equity) increases during the year, after excluding the effects of new owner invest- ment or payment of dividends to owners. What is this approach called? 12. Gross Profit: What equals sales revenues minus the cost of goods sold. This is the money you take in from selling goods and how much those good cost you to make. 13. Net Profit: What is equal to gross profit minus fixed costs. Start with gross profit and subtract fixed costs (rent, salaries, taxes, utilities, fees, amortization, depreciation 14. Gross profit is an important number. If a company is not generating enough from the sale of a product or service to cover the costs directly associated with that product or service, that company will not be able to stay in that line of business for long.: Why is Gross Profit an important number? 15. Operating Income: What measures the performance of the fundamental busi- ness operations conducted by a company and is computed as gross profit minus operating expenses? 16. Operating income tells users how well a business is performing in the activities unique to that business, separate from the financing and income tax management policies that are handled at the corporate headquarters level.: What does Operating Income tell a business? 17. Provides interested parties with information that can be used to predict how a company will perform in the future.: What is a key purpose of financial accounting? 18. Income from Continuing Operations: What is a desired income number that reflects the aspects of a company's performance that is expected to continue into the future? 19. It is computed by subtracting interest expense, income tax expense, and other miscellaneous item