WGU C213 Final Exam
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1. Order of assets Assets are listed in the order of liquidity. Liquidity is the amount of time it would
listed on the bal- usually take to covert an asset into cash. Obviously, cash would be listed first,
ance sheet followed by marketable investments (a company can quickly convert a short-term
investment into cash). Accounts receivable would be listed next followed by inven-
tory, and long-term investments, fixed assets, and intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no specific
order they are listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance sheet;
although, typically you will see paid-in-capital followed by retained earnings fol-
lowed by accumulated other comprehensive income, and lastly, treasury stock.
2. Difference be- The only difference is - a manufacturing company has direct materials (inventory).
tween a manu-
facturing compa-
ny and a service
company.
Period Costs
Product Costs
Service Co. Sell-
ing Costs Direct
Labor
Administrative
Costs Service
Overhead
Manufacturing
Co Selling Costs
Direct Labor
Administrative
, WGU C213 Final Exam
Study online at https://quizlet.com/_8wo9fk
Costs
Manufacturing
Overhead
Direct Materials
(inventory
3. Evaluating a his- Calculation for 2016: 110,.10 = 100,000
torical income
statement to pro-
ject a future in-
come statement.
Projected growth
for 2017 = 10% in-
crease over 2016
sales.
Step 1: Convert
the income state-
ment into a com-
mon-sized in-
come statement.
Step 2: Multi-
ply 2016 sales
by 1.10 (10%
growth) to get
the forecasted
2017 sales. Then
multiply the pro-
jected 2017 sales
by the percent-
ages from step 1.
Now, what would
, WGU C213 Final Exam
Study online at https://quizlet.com/_8wo9fk
you do if you
were given the
2017 sales fig-
ure and you need
to calculate the
2016 sales figure
based off the 10%
growth for 2017?
4. Role of the U. Regulates the U.S. Stock exchanges.
S. Securities and
Exchange Com- Seeks to create a fair information environment in which investors can buy and sell
mission (SEC) in stocks.
financial report-
Congress created the first securities act in 1933 and the second securities act in
ing.
1934 in response to the stock market crash of 1929.
The Securities Act of 1933 requires most companies planning to issue new debt
or stock securities to the public to submit a registration statement to the public for
approval.
The Securities Act of 1934 requires a public company to file detailed periodic
reports including audited financial statements (form 10-K is the annual report;
Form 10-Q is the quarterly report).
Granted the legal authority to establish accounting standards. Currently the SEC
accepts the pronouncements set by FASB.
The SEC can suspend trading of a company's stock, and if hearings show that the
issue failed to comply with the securities laws, the SEC can de-list the security.
Congress strengthened the SEC through the enactment of Sarbanes-Oxley (SOX),
Study online at https://quizlet.com/_8wo9fk
1. Order of assets Assets are listed in the order of liquidity. Liquidity is the amount of time it would
listed on the bal- usually take to covert an asset into cash. Obviously, cash would be listed first,
ance sheet followed by marketable investments (a company can quickly convert a short-term
investment into cash). Accounts receivable would be listed next followed by inven-
tory, and long-term investments, fixed assets, and intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no specific
order they are listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance sheet;
although, typically you will see paid-in-capital followed by retained earnings fol-
lowed by accumulated other comprehensive income, and lastly, treasury stock.
2. Difference be- The only difference is - a manufacturing company has direct materials (inventory).
tween a manu-
facturing compa-
ny and a service
company.
Period Costs
Product Costs
Service Co. Sell-
ing Costs Direct
Labor
Administrative
Costs Service
Overhead
Manufacturing
Co Selling Costs
Direct Labor
Administrative
, WGU C213 Final Exam
Study online at https://quizlet.com/_8wo9fk
Costs
Manufacturing
Overhead
Direct Materials
(inventory
3. Evaluating a his- Calculation for 2016: 110,.10 = 100,000
torical income
statement to pro-
ject a future in-
come statement.
Projected growth
for 2017 = 10% in-
crease over 2016
sales.
Step 1: Convert
the income state-
ment into a com-
mon-sized in-
come statement.
Step 2: Multi-
ply 2016 sales
by 1.10 (10%
growth) to get
the forecasted
2017 sales. Then
multiply the pro-
jected 2017 sales
by the percent-
ages from step 1.
Now, what would
, WGU C213 Final Exam
Study online at https://quizlet.com/_8wo9fk
you do if you
were given the
2017 sales fig-
ure and you need
to calculate the
2016 sales figure
based off the 10%
growth for 2017?
4. Role of the U. Regulates the U.S. Stock exchanges.
S. Securities and
Exchange Com- Seeks to create a fair information environment in which investors can buy and sell
mission (SEC) in stocks.
financial report-
Congress created the first securities act in 1933 and the second securities act in
ing.
1934 in response to the stock market crash of 1929.
The Securities Act of 1933 requires most companies planning to issue new debt
or stock securities to the public to submit a registration statement to the public for
approval.
The Securities Act of 1934 requires a public company to file detailed periodic
reports including audited financial statements (form 10-K is the annual report;
Form 10-Q is the quarterly report).
Granted the legal authority to establish accounting standards. Currently the SEC
accepts the pronouncements set by FASB.
The SEC can suspend trading of a company's stock, and if hearings show that the
issue failed to comply with the securities laws, the SEC can de-list the security.
Congress strengthened the SEC through the enactment of Sarbanes-Oxley (SOX),
