WGU MBA PROGRAM C213 ACCOUNTING OA EXAM 2 LATEST
VERSIONS ACTUAL EXAM 200 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES
Accounting - ANSWER: A system of providing "quantitative information, primarily
financial in nature, about economic entities that is intended to be useful in making
economic decisions."
Accounts Payable - ANSWER: The flip side of accounts receivable—when one
company sells on credit, creating for itself an account receivable, the company on
the other side of the transaction is buying on credit, creating an account payable.
Accounts Receivable - ANSWER: Amounts owed to a business by its credit customers
and are usually collected in cash within 10 to 60 days.
Accrual Accounting - ANSWER: The process that accountants use in adjusting raw
transaction data into refined measures of a firm's economic performance.
Accumulated Depreciation - ANSWER: Reflects the wear and tear, or depreciation, of
these items since they were originally purchased.
Accumulated Other Comprehensive Income - ANSWER: The grouped together and
reported changes which companies experience increases and decreases in equity
each year because of the movement of market prices or exchange rates
Activity-based Costing (ABC) - ANSWER: A method of attributing overhead costs to
products based on measurable factors that relate to activities that create overhead
costs.
Additional Paid-in Capital - ANSWER: Invested by stockholders that exceeds the par
value of the issued shares.
American Institute of Certified Public Accountants (AICPA) - ANSWER: The
professional organization of certified public accountants in the United States.
Asset - ANSWER: Probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events.
Asset Mix - ANSWER: The proportion of total assets in each asset category, is
determined to a large degree by the industry in which the company operates.
Asset Turnover - ANSWER: Sales divided by assets and is interpreted as the number
of dollars in sales generated by each dollar of assets.
, Assets - ANSWER: The firm's economic resources, formally defined as "probable
future economic benefits obtained or controlled by a particular entity as a result of
past transactions or events
Assets-to-equity Ratio - ANSWER: Assets divided by equity and is interpreted as the
number of dollars of assets acquired for each dollar invested by stockholders.
Audit Committee - ANSWER: Members of a company's board of directors who are
responsible for dealing with the external and internal auditors.
Average Collection Period - ANSWER: Shows the average number of days that elapse
between sale and cash collection.
Balance Sheet - ANSWER: A listing of an organization's assets and of its liabilities at a
certain time.
Batch-level Activities - ANSWER: Activities that take place in order to support a batch
or production run, regardless of the size of the batch.
Book Value - ANSWER: The book value of an asset is the asset's cost minus the
asset's accumulated depreciation.
Bookkeeping - ANSWER: The preservation of a systematic, quantitative record of an
activity.
Breakeven Point - ANSWER: The amount of sales at which total costs of the number
of units sold equal total revenues; the point at which there is no profit or loss.
Capital Budgeting - ANSWER: Systematic planning for long-term investments in
operating assets.
Capital Lease Obligations - ANSWER: A long-term liability in the balance sheet.
Cash - ANSWER: Coins and currency as well as the balances in company checking and
savings accounts.
Cash Budget - ANSWER: An important tool in helping management plan its cash
needs. This discussion briefly introduces you to budgeting cash receipts.
Cash Equivalents - ANSWER: Short-term, highly liquid investments such as Treasury
bills, commercial paper, and money market funds.
Cash Flow Adequacy Ratio - ANSWER: Cash from operations divided by expenditures
for fixed asset additions and acquisitions of new businesses
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