WGU C213 Cohort PDFs (Combined 04252024)

WGU C213 Cohort PDFs (Combined 04252024) Leave the first rating Students also studied Terms in this set (278) Save Principles of Finance (C708) - WGU 88 terms rwdixon1993Preview WGU C213 Accounting for Decision ...82 terms Cait_Blankenship Preview Accounting for decision makers C21...504 terms amyarletPreview WGU C 143 term SKB Cost-Volume-Profit AnalysisExamines the relationship between costs, volume, and profits Break-Even PointWhere total revenue equals total costs, resulting in zero profit Contribution MarginSelling price per unit minus variable cost per unit Gross ProfitRevenue minus the cost of goods sold Applied OverheadOverhead rate multiplied by units produced Activity-Based CostingAssigns costs to activities based on their use of resources Cost of Goods SoldDirect materials, direct labor, and manufacturing overhead Product CostsTotal costs incurred in manufacturing a product Pro Forma CalculationsForecasting financial results based on assumptions Transaction AnalysisExamining the impact of business transactions on financial statements Prepaid InsuranceInsurance paid in advance, expensed over time Advertising ExpenseCosts incurred for promoting products or services Times Interest EarnedAbility to cover interest expenses with operating income Cash Flow Adequacy RatioAssesses the ability to meet financial obligations

Debt RatioProportion of a company's assets financed by debt Revenue RecognitionRecording revenue when earned, not necessarily when received Accounting EquationAssets = Liabilities + Owners' Equity Management AccountingInvolves financial and nonfinancial data for internal planning Financial AccountingFollows GAAP, focuses on financial data for external stakeholders Return-on-Investment (ROI)Indicator used in Management Accounting for decision-making DupontIndicator used in Management Accounting for analysis GAAPGenerally accepted accounting principles for Financial Accounting ManagingOne of the processes in Management Accounting ControllingOne of the processes in Management Accounting EvaluatingOne of the processes in Management Accounting Short Run PlanningIncludes production and operational planning Long Run PlanningIncludes Strategic Planning and Capital Budgeting Fixed CostsCosts not dependent on production volume, like rent Variable CostsCosts that vary with production volume, like materials Period CostsCosts dependent on time, like rent or insurance Total RevenuesEqual at the break-even point in Cost-Volume-Profit Analysis Profit MarginDifference between sale price and total costs Direct MaterialsMaterials needed to produce a product or service Direct LaborLabor needed to produce a product or service Manufacturing OverheadCosts directly associated with production Out of Pocket ExpensesCosts requiring cash payment Opportunity CostsValue of the option not utilized Fixed CostA cost unaffected by changes in sales or production levels

Variable CostA cost that fluctuates with sales or production levels Product CostCosts incurred during the production process Direct CostsCosts directly attributable to a specific product or segment Indirect CostsCosts affecting multiple products or segments Differential CostsFuture costs influenced by current decisions Out-of-pocket CostsCosts involving cash outlay or asset use Sunk CostsCosts incurred in the past, unrecoverable Debt RatioLiabilities divided by assets, indicating debt level Current RatioCurrent liabilities divided by current assets, showing short-term payment ability Return on SalesNet income divided by total sales, measuring profit from sales Price-Earnings RatioTotal price of shares divided by net income, showing income per dollar invested Return on EquityNet income divided by Stockholders Equity, indicating profit from investments Asset TurnoverSales divided by total assets, measuring asset efficiency Cash Flow Adequacy RatioNet free cash flow divided by average annual debt value, identifies cash cow companies Cash Times Interest Earned RatioCash before interest and taxes divided by cash paid for interest Financial Statement ErrorsResult from unintentional mistakes in recording transactions, posting transactions, summarizing accounts, etc.Financial Statement FraudResult from intentional manipulation of financial statements for personal gain or to meet forecasts.Internal Controls PurposeTo provide accurate accounting records, safeguard assets, run operations efficiently, and comply with regulations.Elements of Internal Control SystemInclude control environment, risk assessment, control activities, information and communication, and monitoring.Control ActivitiesProcedures like segregation of duties, authorizations, physical control, adequate documents, and independent checks.Preventative ControlsMeasures that aim to prevent problems from occurring in the first place.

Detective ControlsIdentify and catch problems that are occurring before they escalate.Segregation of DutiesAssigning different responsibilities to different individuals to prevent fraud and errors.Proper Procedures for AuthorizationEstablishing correct protocols for approving transactions and actions.Physical Access ControlsRestricting access to assets and records to authorized personnel only.Internal AuditsIndependent evaluations conducted within the organization to assess controls and processes.Reasons for Earnings ManagementManipulating reported earnings to meet internal targets, external expectations, income smoothing, or for presentation purposes.Sarbanes-Oxley (SOX)Legislation ensuring accuracy in financial reports, creating PCAOB, and imposing constraints on auditors and management.PCAOBOversees accounting and auditing profession, registers public accounting firms, establishes audit report standards, and conducts inspections.Constraints on Auditors under SOXProhibited from providing nonaudit services, audit partner rotation every five years, and reporting to the audit committee.Constraints on Management under SOXCEO and CFO certification of financials, reporting on internal controls' effectiveness, and prohibition of loans to executives.External AuditorsIndependent CPAs ensuring GAAP compliance and financial statement accuracy.Internal AuditorsIn-house experts monitoring controls, efficiency, and fraud detection.Securities and Exchange Commission (SEC)Federal agency regulating stock markets, requiring disclosures, and independent audits.AICPAProfessional organization for CPAs, setting ethical standards and providing education.IASBDevelops global accounting standards known as IFRS, not enforced in the US.FASBSets GAAP in the US, supported by business community and accountants.Internal Revenue Service (IRS)Processes tax returns and collects income taxes in the US.Cash BudgetingEnsuring cash availability for bill payments and planning for shortages.Cash Flow ForecastingProjecting cash receipts and payments to assess coverage.Accounts PayableMoney owed by a company to its suppliers for goods or services.