WGU C213 ACCOUNTING FOR DECISION MAKERS EXAM QUESTIONS AND
ANSWERS LATEST () (VERIFIED ANSWERS)
states that the financial results of an economic entity should be reported separately from the
financial results of other entities, even though all those entities may be controlled by the same
person - ANSWER-What is the entity concept?
(revenues-expense= net income) - ANSWER-Equation to calculate net income
When work has been done and collectability of cash can be reasonably assured - ANSWER-
According to accounting rules, when should revenue be recognized?
Operating activities - ANSWER-those activities that comprise the day-to-day operations of a
business.
Investing activities - ANSWER-The purchase and sale of long-term assets such as land and
equipment are known as _______________.
Financing activities - ANSWER-those activities through which cash is obtained from, or repaid to,
creditors and investors
information on the accounting assumptions used in preparing the statements and supplemental
information not included in the statements themselves - ANSWER-What information do the
notes to accounting statements provide?
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 - ANSWER-What are the 4 general types of
accounting notes?
, Conservatism - ANSWER-the practice of recognizing all losses but not recognizing gains until
they are certain
Materiality - ANSWER-the concept that weighs whether a certain dollar amount is large enough
to make a difference to anyone
Articulation - ANSWER-the idea that the three primary financial statements are interrelated
Debt Ratio
Total Liabilities/
Total Assets - ANSWER-Percentage of funds needed to purchase assets that were obtained
through borrowing
Current Ratio
Current Assets/
Current Liabilities - ANSWER-Measure of liquidity; number of times current assets could cover
current liabilities
Return on Sales Ratio
Net Income/
Sales - ANSWER-Number of pennies earned during the year on each dollar of sales
Asset Turnover
ANSWERS LATEST () (VERIFIED ANSWERS)
states that the financial results of an economic entity should be reported separately from the
financial results of other entities, even though all those entities may be controlled by the same
person - ANSWER-What is the entity concept?
(revenues-expense= net income) - ANSWER-Equation to calculate net income
When work has been done and collectability of cash can be reasonably assured - ANSWER-
According to accounting rules, when should revenue be recognized?
Operating activities - ANSWER-those activities that comprise the day-to-day operations of a
business.
Investing activities - ANSWER-The purchase and sale of long-term assets such as land and
equipment are known as _______________.
Financing activities - ANSWER-those activities through which cash is obtained from, or repaid to,
creditors and investors
information on the accounting assumptions used in preparing the statements and supplemental
information not included in the statements themselves - ANSWER-What information do the
notes to accounting statements provide?
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 - ANSWER-What are the 4 general types of
accounting notes?
, Conservatism - ANSWER-the practice of recognizing all losses but not recognizing gains until
they are certain
Materiality - ANSWER-the concept that weighs whether a certain dollar amount is large enough
to make a difference to anyone
Articulation - ANSWER-the idea that the three primary financial statements are interrelated
Debt Ratio
Total Liabilities/
Total Assets - ANSWER-Percentage of funds needed to purchase assets that were obtained
through borrowing
Current Ratio
Current Assets/
Current Liabilities - ANSWER-Measure of liquidity; number of times current assets could cover
current liabilities
Return on Sales Ratio
Net Income/
Sales - ANSWER-Number of pennies earned during the year on each dollar of sales
Asset Turnover
