PASS YOUR 2025 WGU C213 FINAL EXAM
ACCOUNTING FOR DECISION MAKERS ACTUAL
QUESTIONS AND VERIFIED ANSWERS, 100%
GUARANTEE PASS
GAAP stands for - ANSWER-Generally Accepted Accounting Principles
In relation to financial statement or balance sheets; "Not recognized means" - ANSWER-No line item
for this on either sheet
What is Relevance? - ANSWER-A qualitative characteristic, it is associated with information that is
timely, useful, has predicative value, and is going to make a difference to a decision maker.
What is Reliability? - ANSWER-A qualitative characteristic, it is achieved when information is verifiable
by an independent party, objective (not subjective), and you can depend on it.
What does Comparability mean? - ANSWER-Information that becomes much more useful when it can
be related to a benchmark or standard. Also, other firm's results or the firm's own history.
What is Consistency? - ANSWER-This principle states that once you adapt an accounting principle or
method, you should continue to follow it consistently in future accounting periods.
What is financial Conservatism - ANSWER-A pervasive factor in accounting that can be summarized as
follows: when doubt exists concerning two or more reporting alternatives, user should select the
alternative with the least favorable impact on the reported income, assets, and liabilities.
What is Materiality - ANSWER-The question of whether an item is large enough to make any
difference to anyone.Too small to matter.
The heading of a balance sheet must identify what - ANSWER-The company, the statement, and the
date
Lists Assets first in order of... - ANSWER-Liquidity, Liabilities, stock holders' equity
Accrued liabilities - ANSWER-Liabilities that accrue over the passage of time. Is a current liability
Asset, Liability, or Equity: Long-term investments - ANSWER-Is a long term asset
Asset, Liability, or Equity: Land - ANSWER-Long-term assets
Asset, Liability, or Equity: Notes payable (due over the next 5 years) - ANSWER-Long term liability
Asset, Liability, or Equity: Deferred Revenues (expected to be earned in less than a year) - ANSWER-
Current Liability
Asset, Liability, or Equity: Inventory - ANSWER-Current Asset
Asset, Liability, or Equity: Prepaid rent - ANSWER-Current Asset
Asset, Liability, or Equity: Taxes Payable - ANSWER-Current Liabilities
Asset, Liability, or Equity: Accounts Payable - ANSWER-Current Liabilities
, Asset, Liability, or Equity: Short-term investments - ANSWER-Current Assets
Stockholders Equity is calculated by - ANSWER-Total Assets subtracted from Total Liabilities
Long-Term assets is calculated by - ANSWER-Total Liabilities plus Total Stockholders equity minus
Current Assets equals this.
Which term is defined as the residual interest in the net assets of a company? - ANSWER-Owner's
Equity
Income Statement - ANSWER-Reports revenues, expenses, gains, and losses for a specific period of
time.
Net income on income statement - ANSWER-When revenues and gains exceed expenses and losses
Net Loss on income statement - ANSWER-When expenses and losses exceed revenues and gains.
Is sales a part of the operating calculation? - ANSWER-Yes
Is COGS (costs of goods sold) part of the operating calculation? - ANSWER-Yes
Is Interest income part of operating calculation - ANSWER-No
Is interest expense part of calculating operating income? - ANSWER-No
Is operating expenses part of calculating operating income - ANSWER-Yes
Are income taxes expenses part of calculating operating income? - ANSWER-No
GAAP states the following two conditions must be met to recognize revenue - ANSWER-1. The
promised work must be completed. 2. Cash collection should be reasonably assured before revenue is
recognized.
Direct Matching - ANSWER-Directly matching product costs to selling costs
What is Systematic allocation - ANSWER-Systematically matching (think insurance policy, prepay the
policy then realize the benefit later down the road. This depreciates
Immediate recognition - ANSWER-Similar to advertising, this is realized immediately.
On the cash flow statement, the operating section... - ANSWER-Cash flows associated with the income
statement
On the cash flow statement, the investing section... - ANSWER-Cash flows associated with investing in
yourself and others (like buying more property and plants)
On the cash flow statement, the financing section... - ANSWER-Cash flows associated with others
investing in you
Operating Income - ANSWER-Gross profit minus all other expenses except interest and taxes
Gross profit - ANSWER-The difference between the selling price of a product and the cost of the
product
Income from continuing operations - ANSWER-Operating income minus interest expense, income tax
expense, and plus or minus other miscellaneous revenue and expenses.
ACCOUNTING FOR DECISION MAKERS ACTUAL
QUESTIONS AND VERIFIED ANSWERS, 100%
GUARANTEE PASS
GAAP stands for - ANSWER-Generally Accepted Accounting Principles
In relation to financial statement or balance sheets; "Not recognized means" - ANSWER-No line item
for this on either sheet
What is Relevance? - ANSWER-A qualitative characteristic, it is associated with information that is
timely, useful, has predicative value, and is going to make a difference to a decision maker.
What is Reliability? - ANSWER-A qualitative characteristic, it is achieved when information is verifiable
by an independent party, objective (not subjective), and you can depend on it.
What does Comparability mean? - ANSWER-Information that becomes much more useful when it can
be related to a benchmark or standard. Also, other firm's results or the firm's own history.
What is Consistency? - ANSWER-This principle states that once you adapt an accounting principle or
method, you should continue to follow it consistently in future accounting periods.
What is financial Conservatism - ANSWER-A pervasive factor in accounting that can be summarized as
follows: when doubt exists concerning two or more reporting alternatives, user should select the
alternative with the least favorable impact on the reported income, assets, and liabilities.
What is Materiality - ANSWER-The question of whether an item is large enough to make any
difference to anyone.Too small to matter.
The heading of a balance sheet must identify what - ANSWER-The company, the statement, and the
date
Lists Assets first in order of... - ANSWER-Liquidity, Liabilities, stock holders' equity
Accrued liabilities - ANSWER-Liabilities that accrue over the passage of time. Is a current liability
Asset, Liability, or Equity: Long-term investments - ANSWER-Is a long term asset
Asset, Liability, or Equity: Land - ANSWER-Long-term assets
Asset, Liability, or Equity: Notes payable (due over the next 5 years) - ANSWER-Long term liability
Asset, Liability, or Equity: Deferred Revenues (expected to be earned in less than a year) - ANSWER-
Current Liability
Asset, Liability, or Equity: Inventory - ANSWER-Current Asset
Asset, Liability, or Equity: Prepaid rent - ANSWER-Current Asset
Asset, Liability, or Equity: Taxes Payable - ANSWER-Current Liabilities
Asset, Liability, or Equity: Accounts Payable - ANSWER-Current Liabilities
, Asset, Liability, or Equity: Short-term investments - ANSWER-Current Assets
Stockholders Equity is calculated by - ANSWER-Total Assets subtracted from Total Liabilities
Long-Term assets is calculated by - ANSWER-Total Liabilities plus Total Stockholders equity minus
Current Assets equals this.
Which term is defined as the residual interest in the net assets of a company? - ANSWER-Owner's
Equity
Income Statement - ANSWER-Reports revenues, expenses, gains, and losses for a specific period of
time.
Net income on income statement - ANSWER-When revenues and gains exceed expenses and losses
Net Loss on income statement - ANSWER-When expenses and losses exceed revenues and gains.
Is sales a part of the operating calculation? - ANSWER-Yes
Is COGS (costs of goods sold) part of the operating calculation? - ANSWER-Yes
Is Interest income part of operating calculation - ANSWER-No
Is interest expense part of calculating operating income? - ANSWER-No
Is operating expenses part of calculating operating income - ANSWER-Yes
Are income taxes expenses part of calculating operating income? - ANSWER-No
GAAP states the following two conditions must be met to recognize revenue - ANSWER-1. The
promised work must be completed. 2. Cash collection should be reasonably assured before revenue is
recognized.
Direct Matching - ANSWER-Directly matching product costs to selling costs
What is Systematic allocation - ANSWER-Systematically matching (think insurance policy, prepay the
policy then realize the benefit later down the road. This depreciates
Immediate recognition - ANSWER-Similar to advertising, this is realized immediately.
On the cash flow statement, the operating section... - ANSWER-Cash flows associated with the income
statement
On the cash flow statement, the investing section... - ANSWER-Cash flows associated with investing in
yourself and others (like buying more property and plants)
On the cash flow statement, the financing section... - ANSWER-Cash flows associated with others
investing in you
Operating Income - ANSWER-Gross profit minus all other expenses except interest and taxes
Gross profit - ANSWER-The difference between the selling price of a product and the cost of the
product
Income from continuing operations - ANSWER-Operating income minus interest expense, income tax
expense, and plus or minus other miscellaneous revenue and expenses.
