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WGU D774 Intro to Business Accounting 42 studiers today 4.9 (7 reviews) Students also studied Terms in this set (70) Western Governors UniversityD 196 Save D775 WGU Section 1 72 terms man1529Preview D774 - Assessment Study Guide PAR...76 terms evelyn8880Preview D775 - Assessment Study Guide PAR...78 terms evelyn8880Preview D775 In 243 term Kris In which country was the double-entry accounting system developed in the 15th century?Italy
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Which major economic event followed soon after the Stock Market Crash of 1929?Great Depression
Which economic event immediately preceded and led to the passage of the Sarbanes-Oxley Act of 2002?Dot-com bubble
Why are there no standardized regulations relating to the production of managerial accounting information?Company managers can generate any information they want to help them make better decisions, so no outside regulation is needed.
What is a common use of managerial accounting information?Making better planning, operating, and evaluating decisions inside a company
Which report is one of the three primary financial statements?Income statement
Who performs external audits of financial statements? Certified Public Accountant (CPA)
Who selects a corporation’s board of directors? Shareholders of the corporation
What is an advantage of structuring a business as a corporation?Legal existence separated from that of the shareholders
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What is one of the characteristics of a corporation? Ease of transfer of ownership
What is contained in Securities and Exchange Commission Form 10-K?Annual audited financial statements
Why would a company's employees be directly interested in the company's income statement?To assess the current profitability of the company, its performance, and its liquidity
Which information is contained in the reported amount of net income?The amount by which revenues exceed expenses
Which measurement is highlighted in the multi-step format for the income statement?Operating income
Which label refers to the costs of buying or making the products a company sells?Cost of sales
Which item is listed first on the income statement? Revenues
Which item is reported in an income statement? Revenues
In which situation does a company report revenue? When products or services are sold
Which item should be reported as revenue in the income statement?Amount earned from customers for the sale of goods
Alliah Company is preparing to do an initial public offering (IPO) of its shares next year. Alliah knows that investors use a company’s net income in their valuation models to determine how much an IPO company’s shares are worth. Alliah’s founders are eager for this IPO to do well so that their many years of work will be validated in the stock market. Here are some data from
Alliah Company’s financial statements:Inventory
Accounts Payable Expenses Capital Stock (also called Paid-in Capital) Accounts Receivable Cash Retained Earnings Revenue Building Loans Payable Which items are used to compute Alliah’s net income?Revenue and expenses
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The financial records for Freedom Rock Bicycles contain the following accounts.Salary expense Cash Sales Inventory Income tax expense Accounts receivable Which items should be used to compute Freedom Rock’s net income?Sales, salary expense, and income tax expense
The amount of a company’s assets and the amount of the company’s liabilities are known. Which computation should be performed to determine the company’s owners’ equity amount according to the accounting equation?Assets minus liabilities
Alliah Company’s financial records include these accounts at the end of the year.Land Accounts Receivable Buildings Inventory Loans Payable Accounts Payable Retained Earnings Capital Stock (also called Paid-in Capital) Cash Which set of items is a complete listing of Alliah’s current assets?Cash, accounts receivable, and inventory
How does capital stock differ from inventory? Capital stock is equity; inventory is an asset.
Endothon Company has these accounts in its financial records at the end of the year.Land Retained Earnings Accounts Receivable Loans Payable Accounts Payable Capital Stock (also called Paid-in Capital) Cash Which of these accounts are assets?Cash, accounts receivable, and land
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Kretsmart has these accounts in its financial records at the end of the year.Land Retained Earnings Accounts Receivable Loans Payable Accounts Payable Capital Stock (also called Paid-in Capital) Cash Unearned Revenue Which of these accounts are liabilities?Accounts payable, loans payable, and unearned revenue
How does a comparative balance sheet provide information that is useful to a decision maker?It compares last year's balance sheet to this year's balance sheet, allowing for the easy identification of changes.
Which description is a characteristic of owners’ equity? Residual amount representing the net assets of a company
Which action is a use of cash in an investing activity? Buying a machine
Which statement describes investing activities? Purchasing and selling property, plant, and equipment
Consider these three cash flows:
Cash paid to repay a loan Cash paid for purchase of a building for use in operations Cash paid for inventory purchases Which sequence represents the correct categorization of these three cash flows?Loan repayment—financing; building purchase—investing; inventory purchase— operating
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Which section of the statement of cash flows is the income statement directly connected to?Operating
Which type of cash collection is an operating activity? Collecting cash from customers
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