WGU C213 Final Exam Accounting for Decision Makers

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WGU C213 Final Exam Accounting for Decision Makers Questions and Answers (2023/2024) (Verified Answers)

• What does accounting focus on ANS The impact a business's activities

have on its overall financial performance

• Which report summarizes cash collections and cash expenditures from

operating, investing, and financing activities over a period of time ANS Statement of cash flows

• Which users would have a primary concern with an organization's ability to

provide healthcare benefits ANS Employees

• Which benefit does a corporation gain by following Generally Accepted Ac-

counting Principles (GAAP) ANS An increase in its comparability to other companies

• Which body regulates a certified public accounting firm's audit practices 1 / 4

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when the firm is auditing a large publicly traded company ANS The Public Com- pany Accounting Oversight Board (PCAOB)

• What has had the most significant impact on accounting practices ANS

Infor- mation technology

• What two items of information are revealed on the balance sheet ANS

Owner- ship & Debt

• Which term is defined as the residual interest in the net assets of a compa-

ny ANS Owners' equity

• A corporation has total liabilities of $300 million, total owners' equity of

$100 million, and current assets of $50 million.What is the value of the firm's long-term assets ANS $350 million

• Which situation should result in revenue recognition on the income state-

ment for the year ending 12/31/14 if the firm is using accrual-basis account- ing ANS In 2014, a company provides services to a customer for which cash will be collected the next year (2015).

• Which category on the statement of cash flows summarizes cash receipts

and payments to owners and creditors of the company ANS Cash flows from financing activities 2 / 4

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• Where would an investor find a summary of a company's significant ac-

counting policies ANS In the notes to financial statements

• Which assurance does an external audit report provide for its readers

ANS - The company's financial statements fairly reflect its financial position

14. Reliable. Match each accounting term with its definition.: Information that

can be verified

15. Relevant. Match each accounting term with its definition.: Information hav-

ing to do with the matter at hand 3 / 4

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• Material. Match each accounting term with its definition.: Information that is

important enough to make a difference

17. Conservatism. Match each accounting term with its definition.: Information

related to recognizing losses as they occur

18. Order the steps in the decision cycle from first (1) to last (5).: PAGMI

• What does it mean if a company has a debt ratio of 101.5% ANS The

company has 1.5% more total liabilities than total assets.

• What is consistent with a continual decline in gross profit if the firm's cost

of goods sold remains the same ANS Continual decrease in sales

• Which cash flow adequacy ratios represent a cash cow ANS $6,991 /

$5,486

• Which cash flow adequacy ratios represent a cash cow ANS $5,220 /

$1,875

• Which formula yields a cash times interest earned ratio of 11 ANS Cash

before interest and taxes of $11,000 / cash paid for interest of $1,000

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