WGU C213 Topics 1-6 Quizzes 2022 (51% of Exam Competencies)

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The emphasis in financial accounting is on which of the following external user groups? - ANSWER Investors and creditors The primary internal group that uses accounting information is? - ANSWER Man... agement Internal reports are generally used by? - ANSWER Management Which of the following is NOT an external user of financial information? - ANSWER Management Which of the following is NOT true of the Financial Accounting Standards Board (FASB)? - ANSWER It is a government agency Generally accepted accounting principles are? - ANSWER Developed by accounting rule makers The initials GAAP stand for? - ANSWER Generally Accepted Accounting Principles The current standard-setting board for accounting in the private sector is the? - ANSWER Financial Accounting Standards Board (FASB) Which of the following is the government agency that stipulates the rules and regulations that govern the collection of taxes in the United States? - ANSWER Internal Revenue Service The organization that develops worldwide accounting standards is the? - ANSWER International Accounting Standards Board (IASB) Standards established by the International Accounting Standards Board are referred to as? - ANSWER International Financial Accounting Standards Which of the following is NOT a service typically provided by large public accounting firms? - ANSWER Making management decisions Which of the following organizations has specific legal authority to establish accounting standards for publicly held companies? - ANSWER Securities and Exchange Commission (SEC) Which of the following is NOT a reason for the integration of worldwide accounting standards? - ANSWER The theoretical necessity of a common set of accounting standards The International Accounting Standards Board (IASB) is charged with developing worldwide accounting practices? True or False? - ANSWER True With the current state of information technology, investors outside a company are now allowed access to a company's internal database of financial information and do their own customized analysis of a firm's performance. True or False? - ANSWER False While the technology may be available, companies are still not allowing outsiders access to their internal accounting records. True or False? - ANSWER True Increased federal oversight of the audit process resulted from the passage of the following act of Congress - - ANSWER Sarbanes-Oxley Act A borrower benefits from providing financial information regarding income and expenses in the form of a lower interest rate on the loan because of reduced uncertainty for the lender with regard to repayment. True or False? - ANSWER True Which of the following is NOT one of the three primary financial statements? - ANSWER The Statement of Retained Earnings One reason for a company's preparing and providing financial statements is to reduce uncertainty for an investor regarding the firm's future financial performance. True or False? - ANSWER True Which of the following distinguishes between current and long-term assets? - ANSWER Classified balance sheet Which of the following financial statements provides a picture of the enterprise at a particular point in time? - ANSWER Balance sheet Which of the following is the reason that the accounting equation is true by definition? - ANSWER Liabilities and owner's equity are the sources that fund the purchase of assets The idea that businesses must be accounted for as though they will exist at least for the forseeable future is the? - ANSWER Going concern concept Revenues cause? - ANSWER An increase in net assets Which of the following is an overall measure of the performance of a business entity's activities? - ANSWER Net income (or net loss) The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or a year, is called a(n)? - ANSWER Income Statement Which of the following would be included on an income statement? - ANSWER Rent expense Another name for the income statement is? - ANSWER Statement of earnings Which of the following classification does NOT appear on the Statement of Cash Flows? - ANSWER Borrowing Which of the following classifications refers to those activities whereby cash is obtained or repaid to owners and creditors? - ANSWER Financing Which of the following activities would NOT be classified as an investing activity? - ANSWER Purchase of inventory Which of the following activities would be classified as a financing activity? - ANSWER Repayment of a loan Vital information that CANNOT be captured solely by dollar amounts is reported in a firm's... - ANSWER Notes to financial statements Which of the following is NOT one of the four general types of financial statement notes? - ANSWER Supplementary information required by the Internal Revenue Service Which of the following is an example of a significant accounting policy that would be explained in the notes to the financial statements? - ANSWER The method used to estimate depreciation on a piece of equipment Which of the following is an example of a disclosure of information NOT recognized that would be explained in the notes to the financial statements? - ANSWER The disclosure of the uncertain, potential outcome of a lawsuit Which of the following is an example of additional information about summary totals that would be explained in the notes to the financial statements? - ANSWER The description of all the individual items that comprise notes payable An independent audit report is usually issued by? - ANSWER A certified public accountant In completing an audit of a company's financial statements, auditors... - ANSWER Provide some assurance that the financial statements are not misleading The accuracy of the information contained in the financial statements is the responsibility of the? - ANSWER Management Which of the following are the two economic factors that enable us to trust an independent auditor despite the fact that the auditor was hired by the company being audited? - ANSWER Reputation of auditor and risk of lawsuits The idea that certain figures on an operating statement help to explain changes in figures on comparative balance sheets is referred to as... - ANSWER Articulation The idea that information becomes more useful when it can be related to a benchmark or a standard is referred to as... - ANSWER Comparability The notion that when doubt exists concerning two or more reporting alternatives, users should select the alternative with the least favorable impact on reported income, assets, and liabilities is referred to as... - ANSWER Conservatism Whether an item is big enough that proper accounting will make a difference to users of accounting information is referred to as... - ANSWER Materiality The notion that information will be more useful if it will impact a decision is referred to as... - ANSWER Relevance Which of the following would be classified as a long-term asset? - ANSWER Land Which of the following decreases owners' equity? - ANSWER Operates generate a loss Which of the following would be classified as a current asset? - ANSWER Accounts receivable Which of the following generally is NOT considered to be a liability? - ANSWER Inventory 1. The following data were taken from the records of Moss Corporation for the year ending December 31, 2012: 01/01/12 Assets =$11,250 Liabilities = $8,580 Owners' equity = ? 12/31/12 Assets = ? Liabilities = $10,365 Owners' equity = $6,465 Given the above information, assets on December 31, 2012, were: o $18,060 o $11,250 o $5,025 o $16,830 - ANSWER $16,830 Current assets usually are listed on a balance sheet in... - ANSWER Decreasing order of liquidity Which of the following accounts would NOT be considered a current asset? - ANSWER Equipment In non-U.S. Balance sheets, you will often see each of the following EXCEPT: - ANSWER The stockholders' equity section will be listed first on the balance sheet Historical cost has long been used in accounting because it is... - ANSWER Reliable This is sometimes done in place of recognition when the effects of an event cannot be quantified with any degree of certainty. - ANSWER Disclosure Reporting the details of a transaction in the notes to the financial statements is called? - ANSWER Disclosure The process of formally recording an item in the accounting records so that it will be reflected in the financial statements is called? - ANSWER Recognition The process of valuation involves computing numbers that are both? - ANSWER Relevant and reliable When a company borrows money from a bank to be repaid in over time, the effect on the accounting equation for the company will be to? - ANSWER Increase Cash and increase Bank Loan Payable When an investor pays cash into a business to become a part owner, the effect on the accounting equation for the business will be to - ANSWER Increase Cash and increase Paid-in Capital When a company pays for a warehouse by paying cash, the effect on the accounting equation will be to? - ANSWER Increase Buildings and decrease Cash When a company rents a warehouse by paying for the first six month's rent in advance, the effect on the accounting equation on the day of payment would be to? - ANSWER Increase Prepaid Rent and decrease Cash When a company buys a warehouse by using a mortgage with a local bank, the effect on the accounting equation for the company will be to? - ANSWER Increase Buildings and increase Mortgage Payable A company's asset mix is determined by? - ANSWER Dividing each asset item on the balance sheet by total assets A company's asset mix is strongly influence by? - ANSWER The company's industry Financing mix is a measure of? - ANSWER The degree to which a company finances assets using liabilities or owners' equity Given the following information, compute net income - Cost of Goods Sold = $2,000 Extraordinary Item = $-170 Income Taxes = $350 Interest Expense = $200 Operating Expenses = $1,500 Sales = $5,500 o $1,450 o $2,000 o $1,280 o $3,500 - ANSWER $1,280 (Breakdown: $5,500 - $2,000 - $1,500 - $350 - $200 - $170 = $1,280) Given the following information, compute comprehensive income - Extraordinary Loss = $-80 Income Taxes = $150 Interest Expense = $100 Operating Income = $1,500 Unrealized Gain not included in Net Income = $120 o $1,170 o $1,500 o $1,290 o $1,250 - ANSWER $1,290 (Breakdown: $1,500 - $150 - $100 - $80 +120 = $1,290) Operating Income is equal to - - ANSWER Income from Continuing Operations plus Income Tax Expense and Interest Expense plus/minus other miscellaneous revenues, expenses, gains, and losses The proper order on an income statement for the various measures of income is? - ANSWER Gross profit, operating income, income from continuing operations, net income, comprehensive income A measure of a company's performance that includes all items that are expected to continue into the future is - - ANSWER Income from Continuing Operations During the month, Meridian Company had the following cash transactions: Cash collected from customers = $12,500 Cash received from a loan = $8,000 Cash paid for wages payable = $(5,750) Cash paid for the purchase of a building = $(15,000) Cash received for the issuance of new shares of stock = $2,600 Cash received from sale of land = $6,400 Cash paid for rent = $(2,500) Cash paid for dividends = $(1,500) Given the above information, compute cash flow from operating activities. o $20,750 o $9,250 o $4,250 o $15,750 - ANSWER $4,250 (Breakdown: Operating activities: $12,500 - $5,750 - $2,500 = $4,250) Which of the following is a revenue generating activity? - ANSWER Selling a product Which of the following is the correct way to date an income statement? - ANSWER For the Year Ended December 31, 2012 The following information was taken from the records of Tellers Corporation for the month ended December 31, 2012: Advertising expense = $20,625 Income tax expense = $13,095 Accounts payable = $13,450 Dividends paid = $14,125 Retained earnings (12/1/12) = $57,860 Consulting fees revenue = $93,550 Rent expense = $11,728 Supplies expense = $16,917 If Tellers has 2,100 shares of stock outstanding, earnings per share is approximately a. $4.67 [Show More]

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