WGU C213 Accounting for Decision Makers PVAC Study Guide 2024

What does accounting focus on? - The impact a business's activities have on it's overall financial performance The idea that the activities of the entity are to be separated from those of the individual owner is the Money measurement concept Going concern assumption Separate entity concept Arm's-length transaction assumption - Separate entity concept Going Concern Assumption - the business will remain in operation for the foreseeable future Separate Entity Concept - The business is treated as a separate entity, separated from its owners, creditors and customers. The idea that businesses must be accounted for as though they will exist at least for the foreseeable future is the Entity concept Going concern concept Arm's-length transaction assumption Monetary measurement concept - Going concern concept Entity Concept - separating the business affairs from the personal affairs of the owner Another name for the balance sheet is the Statement of financial position Retained earnings statement Statement of cash flows Statement of earnings - Statement of financial position balance sheet - A financial statement that reports assets, liabilities, and owner's equity on a specific date. Retained Earnings Statement - A financial statement that summarizes the changes in retained earnings for a specific period of time. Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? - Statement of cash flows Which of the following is true of the balance sheet? It discloses the amount of dividends paid. It identifies a company's assets and liabilities as of a specific date. It includes revenue and expense accounts. It shows the results of operations for an accounting period. - Financial Accounting Standards Board - The body that writes the generally accepted accounting principles by which the financial statements of US firms must be prepared. Owner's Equity - the amount remaining after the value of all liabilities is subtracted from the value of all assets paid-in capital - The amount stockholders paid into the corporation in exchange for shares of ownership. Equity Treasury Stock - When a company buys back its own shares Given the following information, compute income from continuing operations - Cost of Goods Sold $2,000 Extraordinary Item -170 Income Taxes 350 Interest Expense 200 Operating Expenses 1,500 Sales 5,500 - Answer: $1,450 $5,500 - $2,000 - $1,500 - $350 - $200 = $1,450 not Extraordinary Item $170 continuing operations - The revenues, expenses, and profit or loss generated from a company's ongoing activities. Not extraordinary items Which users would have a primary concern with an organization's ability to provide healthcare benefits? - Employees Which of the following would be classified as a long-term asset? Inventory Accounts receivable Land Accounts payable - Land Which of the following accounts is NOT an asset account? Prepaid Expenses Accounts Receivable Accounts Payable Equipment - Accounts Payable