C213 Accounting for Decision Makers WGU Questions and Answers with complete

Describe the purpose of accounting. - Answer-Accounting is the recording of day-to-day financial activities and the organization of information into a summary of reports that evaluate the company's financial status. Which financial statements are used in financial accounting? - Answer-1. Balance Sheet 2. Income Statement 3. Statement of Cash Flows Who are the "users" of financial statements? - Answer-Lenders, Investors, Management, Suppliers, Customers, Employees, Competitors, Government Agencies, and the Press. Identify US accounting rules and standards board. - Answer-FASB=Financial Accounting Standards Board 7 key members GAAP=Generally Accepted Accounting Principles Not a government agency Private group Started in 1973 What are some of the accredited organizations? - Answer-SEC=Securities and Exchange Commission AICPA=American Institute of CPA's PCAOB=Public Company Acctg. Oversight Board IRS=Internal Revenue Service IASB=International Acctg. Standards Board What are the current trends that are causing major changes in the field of accounting? - Answer- *Rapid advance in information Technology *International integrations of worldwide businesses *Increase scrutiny associated w/ large acctg. scandals.Identify the purpose of a financial statement - Answer-1. Increasing information available about a company, financial statements make it easier for a company to attract investors, lenders, and other parties. 2. Financial statements make it easier to get better interest rates on loans. 3. Attracts investors on more favorable terms. What are the components to a balance sheet? - Answer-It reports the company's financial position as any specific point in time, it includes: * Resources (Assets) * Obligations (Liabilities) *Net Ownership Interest (owner's/stockholders equity) What is the accounting equation to calculate total assets, total liabilities, and/or total owners/stockholders equity? - Answer-Assets = Liabilities + Owners/Stockerholders Equity What is the purpose of the income statement? - Answer-To describe the company's financial performance for a period of time.