WGU 213 Balance Sheet Statements Questions and Answers 2023/2024

WGU 213 Balance Sheet Statements Questions and Answers 2023/2024 What two items of information are revealed on the balance sheet? - Correct Answer Ownership and debt Which term is defined as the residual interest in the net assets of a company? - Correct Answer Owner's 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? - Correct Answer $350 million Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting? - Correct Answer 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? - Correct Answer Cash flows from financing activities Where would an investor find a summary of a company's significant accounting policies? - Correct Answer In the notes to financial statements Which assurance does an external audit report provide for its readers? - Correct Answer The company's financial statements fairly reflect its financial position Reliable - Correct Answer Information that can be verified Relevant - Correct Answer Information having to do with the matter at hand Material - Correct Answer Information that is important enough to make a difference Conservatism - Correct Answer Information related to recognizing losses as they occur Steps in the decision cycle - Correct Answer 1. Prepare financial statements 2. Analyze financial statements 3. Gather information 4. Make decision 5. Implement decision Partial financial information for a company is as follows: Current assets$36,543Total assets$58,719Current liabilities$24,824Total liabilities$48,561Stockholders' equity$10,158Sales$46,997Net Income$ 3,761Market value of shares$41,316 What is the price-earnings (PE) ratio for this company? - Correct Answer 11.0 What does it mean if a company has a debt ratio of 101.5%? - Correct Answer 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? - Correct Answer Continual decrease in sales Which two cash flow adequacy ratios represent a cash cow? - Correct Answer $6,991 / $5,486 ; $5,220 / $1,875 Which formula yields a cash times interest earned ratio of 11? - Correct Answer Cash before interest and taxes of $11,000 / cash paid for interest of $1,000 Which two values affect the measurement of net income? - Correct Answer Operating expenses, ordinary gains and losses