D196 - study set WGU

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91 terms Sop Accounting plays a vital role in the decision-making process. Which action is the first step in the decision- making process.Identify the issues The money that a company needs to buy its land, pay its employees, and buy its supplies is called capital. What are the potential sources of capital for a business.Investors, creditors, and retained business earnings.Accountants measure and communicate the results of business activities.True Which primary area of accounting generates reports for internal users.Management accounting Which group use financial information to evaluate whether a company will be able to repay a loan.Lenders Which of the primary financial statements reports the resources, obligations, and owner's equity of a company Balance sheet What is the role of the IASB regulating accounting standards Establish international accounting standards What group of people make up the FASBPeople from a variety of business-related backgrounds What is the role of the GASB in setting accounting standards The GSAB is a private-sector organization the establishes accounting and financial reporting standards for the U.S. state and local governments

In what way do accountants have an economic incentive to conduct themselves ethically The value of the information produced by accountants is related to the confidence that users have in the reliability of that information How is it possible for an accountant to intentionally deceive financial statement users and still technically be in compliance with generally accepted accounting principles (GAAP) There is flexibility inherent in the assumptions underlying the preparation of financial statements Your boss has approached you with a concerning letter from the IRS and ask you to explain the role of the IRS in regulating accounting standards. Based on the role of the IRS, what would be the problem detailed in the letter The company has not filed its taxes in accordance to the law Anika is considering investing in a tech company that is known for developing smart home appliances. Before investing, Annika first wants to ensure that the companies past performance has been satisfactory and that the company manages its cash flows well. What type of accounting information would provide this evidence for Anika Financial reports Alliah company just released it's public accounting data for 2019. Which user of accounting information will monitor this data to ensure that the company is providing sufficient information for investors.Government agencies A new product line manager approaches the accounting department in order to understand the past performance of the product line he has been asked to manage in the future. Which role of accounting involves obtaining and using financial information to determine the financial health and performance of a business or product line?Evaluation You read in the newspaper that a local company you are familiar with has been found guilty in court of publishing financial statements that are false and misleading to users of those financial statements. In this situation, what could the American Institute of Certified Public Accountants (AICPA) do in response to the accountants who were found guilty of unethical conduct in accounting practices?Implement professional sanctions What is the correct summary sequence in the accounting cycle?Analyze, Record, Summarize, Prepare Business documents, such as a sales invoice, a purchase order, or a check stub, are an important part of the accounting process. From an accounting cycle standpoint, what is purpose of business documents?To confirm that a transaction has occurred What is the purpose of the financial accounting cycle? To turn transactions into financial statements and provide useful financial information for decision makers

What is a transaction in accounting?An interaction in which two parties exchange something of value In the context of the financial accounting cycle, what is the definition of an account?A specific accounting record that provides an efficient way to categorize similar types of transactions What is an arm's-length transaction?An exchange between two independent parties Which event represents a transaction recorded as part of the financial accounting cycle?The sale of a product for cash or on account A company sells a product to a customer on account.Which part(s) of the accounting equation does this particular transaction change?Both assets and owners' equity What is an example of an internal transaction?An employee is transferred from one department to another Which item is a liability?mortgage After Oliver records each transaction, how should he ensure that the accounting equation remains in balance?Add up the balances in all of the asset accounts and compare them to the sum of all the liability and owners' equity accounts After determining the company's financial position, Oliver recommends that the company borrow money from the bank for the next accounting period. What is the effect of borrowing money from the bank for the next accounting period on the company's books?Cash (an asset) and a liability account both increase.Which account is an example of a liability?accounts payable Which of the primary financial statements reports the amount of cash collected and paid out by a company?Statement of cash flows What is the name for the authoritative set of accounting standards in the United States?

GAAP Which statement is a correct description of the IASB? It establishes international accounting standards.Which action is part of the financial accounting cycle? Summarizing financial information in financial statements What is owners' equity?The remaining claim to the assets of a business after liabilities have been deducted Most businesses have a systematic method for analyzing transactions and collecting and recording transaction- related information. This transformation process is which part of accounting?The accounting cycle Which event is an example of collecting, analyzing, and summarizing accounting information?Gathering checkbook information

Which accounting transaction should be recorded in the books and the records of a company?Purchasing new equipment for the company Which event is a transaction?Purchasing an item on the internet from an online store What is the Securities and Exchange Commission (SEC)? The U.S. government agency charged with regulating financial markets and ensuring the availability of reliable financial information Which resource or tool is used to identify unique companies in the SEC's 10-K filing database?Central Index Key (CIK) How often is the Form 10-Q filed?Quarterly How often is the Form 10-K filed?Annually Why does the balance sheet not reflect the current value or worth of a company?Many assets are recorded at cost, and some economic assets are not recorded at all.Which statement best characterizes the elements and purposes of a balance sheet?A balance sheet portrays the financial condition of a company at a point in time What is owners' equity?The residual amount representing the net assets available to another party after all obligations have been satisfied What information should be included on the balance sheet?Assets and liabilities What is net income?The amount by which revenues exceed expenses.what is a gainMaking money from an activity outside the normal activities of a business What is an income statement?A report of the revenues and expenses of a company during a period Which statement best characterizes the elements and purposes of a statement of retained earnings?A statement of retained earnings portrays the accumulated profits or losses of a company at a point in time Which of these activities is an investing activity? Buying buildings Which of these activities in an operating activity selling goods What is the statement of cash flows?reports of the operating, investing, and financing cash flows of a company over a period of time Why do the notes to the financial statements contain additional information about summary totals?Because one summary number in the financial statements represents literally thousands of individual items Why do the notes to the financial statements contain a summary of significant accounting policies?Because accounting involves making assumptions, estimates, and judgments