WGU C213 Accounting for Decision Makers
(revenues-expense= net income) - ANS - Equation to calculate net income
\1. Rapid Advancements in the IT field
2. the international integration of worldwide business
3. Increased scrutiny associated with large corporate accounting scandals - ANS
- Which 3 factors have combined to make right now a time of significant change
in accounting?
\1. Summary of accounting policy
2. Additional info about summary totals
3. Disclosure of info not included in summary
4. Supplemental disclosure required by FASB or SEC - ANS - What are the 4
general types of accounting notes?
\1) to predict a company's future profitability and cash flows
2) to identify and improve potential problem areas - ANS - What are the two main
purposes of financial statement analysis?
\2 years, Comparative side-by-side format - ANS - How many years worth of
balance sheets does a company usually provide and how are they typically
formatted?
\Accounting - ANS - 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
\Accounting information - ANS - Info that is intended to be useful in making
decisions about the future.
\accounting system - ANS - 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
\American Institute of Certified Public Accountants (AICPA) - ANS - the
professional organization of certified public accountants (CPAs) in the United
States
\Articulation - ANS - the idea that the three primary financial statements are
interrelated
\Asset Mix - ANS - the proportion of total assets in each asset category that is
largely determined by the industry in which the company operates
\Asset Turnover
Sales/
, Total Assets - ANS - Number of dollars of sales during the year generated by each
dollar of assets
\Asset turnover is computed as sales divided by assets and is interpreted as the
number of dollars in sales generated by each dollar of assets - ANS - In terms of
ROE, define efficiency.
\Assets - ANS - probable future economic benefits obtained or controlled by a
company as a result of past transactions or events
\Assets = Liabilities + Owners' Equity - ANS - What is the accounting equation?
\Assets-to-equity ratio is computed as assets divided by equity and is interpreted
as the number of dollars of assets a company is able to acquire using each dollar
invested by stockholders - ANS - In terms of ROE, define leverage.
\Balance Sheet - ANS - Reports a company's assets, liabilities, and owners' equity
\Balance Sheet - ANS - reports a company's financial position at a specified point
in time and lists the company's resources (assets), obligations (liabilities), and
net ownership interest (owners' equity).
\Bookkeeping - ANS - the preservation of a systematic, quantitative record of an
activity
\By order of liquidity - ANS - In what order are assets typically listed on the
balance sheet?
\Cash - ANS - What is the first item that is usually listed on a U.S. balance sheet?
\cash, accounts receivable, and inventory - ANS - What are the most common
current assets?
\Common stockholders are the true owners of a business; Preferred stockholders
give up some of the rights of ownership enjoyed by common stockholders in
exchange for some of the safety promised to creditors - ANS - What is the
difference between a common stockholder and a preferred stockholder?
\companies report the intangibles that they have purchased from other
companies but not the intangibles that they have developed themselves - ANS -
Which intangible assets are reported on the balance sheet?
\Comprehensive Income - ANS - net income plus or minus adjustments for
changes in company wealth stemming from changes in certain exchange rates,
interest rates, or financial instruments' values
\Conservatism - ANS - the practice of recognizing all losses but not recognizing
gains until they are certain
\cost of goods sold; selling, general, and administrative expense, depreciation
expense, income tax expense, and interest expense - ANS - What are the key
expense items commonly found on the income statement?
\Current and Long-term - ANS - Liabilities are divided into which 2 categories on
the balance sheet?
(revenues-expense= net income) - ANS - Equation to calculate net income
\1. Rapid Advancements in the IT field
2. the international integration of worldwide business
3. Increased scrutiny associated with large corporate accounting scandals - ANS
- Which 3 factors have combined to make right now a time of significant change
in accounting?
\1. Summary of accounting policy
2. Additional info about summary totals
3. Disclosure of info not included in summary
4. Supplemental disclosure required by FASB or SEC - ANS - What are the 4
general types of accounting notes?
\1) to predict a company's future profitability and cash flows
2) to identify and improve potential problem areas - ANS - What are the two main
purposes of financial statement analysis?
\2 years, Comparative side-by-side format - ANS - How many years worth of
balance sheets does a company usually provide and how are they typically
formatted?
\Accounting - ANS - 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
\Accounting information - ANS - Info that is intended to be useful in making
decisions about the future.
\accounting system - ANS - 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
\American Institute of Certified Public Accountants (AICPA) - ANS - the
professional organization of certified public accountants (CPAs) in the United
States
\Articulation - ANS - the idea that the three primary financial statements are
interrelated
\Asset Mix - ANS - the proportion of total assets in each asset category that is
largely determined by the industry in which the company operates
\Asset Turnover
Sales/
, Total Assets - ANS - Number of dollars of sales during the year generated by each
dollar of assets
\Asset turnover is computed as sales divided by assets and is interpreted as the
number of dollars in sales generated by each dollar of assets - ANS - In terms of
ROE, define efficiency.
\Assets - ANS - probable future economic benefits obtained or controlled by a
company as a result of past transactions or events
\Assets = Liabilities + Owners' Equity - ANS - What is the accounting equation?
\Assets-to-equity ratio is computed as assets divided by equity and is interpreted
as the number of dollars of assets a company is able to acquire using each dollar
invested by stockholders - ANS - In terms of ROE, define leverage.
\Balance Sheet - ANS - Reports a company's assets, liabilities, and owners' equity
\Balance Sheet - ANS - reports a company's financial position at a specified point
in time and lists the company's resources (assets), obligations (liabilities), and
net ownership interest (owners' equity).
\Bookkeeping - ANS - the preservation of a systematic, quantitative record of an
activity
\By order of liquidity - ANS - In what order are assets typically listed on the
balance sheet?
\Cash - ANS - What is the first item that is usually listed on a U.S. balance sheet?
\cash, accounts receivable, and inventory - ANS - What are the most common
current assets?
\Common stockholders are the true owners of a business; Preferred stockholders
give up some of the rights of ownership enjoyed by common stockholders in
exchange for some of the safety promised to creditors - ANS - What is the
difference between a common stockholder and a preferred stockholder?
\companies report the intangibles that they have purchased from other
companies but not the intangibles that they have developed themselves - ANS -
Which intangible assets are reported on the balance sheet?
\Comprehensive Income - ANS - net income plus or minus adjustments for
changes in company wealth stemming from changes in certain exchange rates,
interest rates, or financial instruments' values
\Conservatism - ANS - the practice of recognizing all losses but not recognizing
gains until they are certain
\cost of goods sold; selling, general, and administrative expense, depreciation
expense, income tax expense, and interest expense - ANS - What are the key
expense items commonly found on the income statement?
\Current and Long-term - ANS - Liabilities are divided into which 2 categories on
the balance sheet?
