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C213 WGU OA Prep 20 studiers today 4.9 (15 reviews) Students also studied Terms in this set (208) Western Governors UniversityC 214 Save WGU C214 Concepts Only Multi Cho...222 terms ctcaw259Preview WGU C214 Concepts Only Multi Cho...Teacher 222 terms Lydia_Smith75 Preview WGU C213 Final Exam Teacher 73 terms zhanleonPreview WGU C 136 term jaso The ability a company has to pay its debts in the short run is its Liquidity
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Which of the following is a measure of the liquid position of a corporation?Debt ratio
Which of the following ratios is used to measure a firm's leverage?Debt Ratio
Which of the following ratios is used to measure the profit earned on each dollar invested in a firm?Return on Equity
The emphasis in financial accounting is on which of the following external user groups?Investors and creditors
The primary internal group that uses accounting information is Management
Internal reports are generally used byManagement
Which of the following is NOT an external user of financial information?Management
Which of the following is NOT true of the Financial Accounting Standards Board (FASB)?It is a government agency
Generally accepted accounting principles are Developed by accounting rule makers
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The initials GAAP stand forGenerally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the Financial Accounting Standards Board (FASB)
The organization that develops worldwide accounting standards is the International Accounting Standards Board (IASB)
The initials CPA stand forCertified Public Accountant
Which of the following is NOT a service typically provided by large public accounting firms?Making management decisions
Standards established by the International Accounting Standards Board are referred to as International Financial Reporting Standards
Which of the following is the government agency that stipulates the rules and regulations that govern the collection of taxes in the United States?Internal Revenue Service
Which of the following is NOT a reason for the integration of worldwide accounting standards?the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing worldwide accounting practices?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.False
Increased federal oversight of the audit process resulted from the passage of the following act of Congress - 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
Which of the following is NOT one of the three primary financial statements?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
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Which of the following accounts is considered to be the most liquid?Cash
Which of the following types of accounts are NOT found on the balance sheet?Revenues
The financial statement that reports resources owned, the obligations to transfer resources to other organizations, and the claims by the entity's owners is known as the Balance sheet
The idea that the activities of the entity are to be separated from those of the individual owner is the Separate entity concept
The basic accounting equation isAssets = Liabilities + Owners' Equity
Which of the following would be included on an income statement?Rent expense
Costs that are incurred during the normal operations of a business to generate revenues are called Expenses
Another name for the income statement is Statement of earnings
Revenues causeAn increase in net assets
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) Income Statement
Which of the following activities would NOT be classified as an investing activity?Purchase of inventory
A major source of cash from operating activities is Receipts from sale of goods
Which of the following classifications refers to those activities associated with buying and selling long-term assets?Investing
Which of the following classifications does NOT appear on the Statement of Cash Flows?Borrowing
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Vital information that CANNOT be captured solely by dollar amounts is reported in a firm's Notes to financial statements
Which of the following is NOT one of the four general types of financial statement notes?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?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?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?The description of all the individual items that comprise notes payable
An independent audit report is usually issued by A certified public accountant
In completing an audit of a company's financial statements, auditors 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 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?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 Articulation
The idea that information becomes more useful when it can be related to a benchmark or a standard is referred to as 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 Conservatism
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