WGU C213 PA & OA Study Guide #2 Questions And Solutions
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Course
WGU C213 PA & OA
Institution
WGU C213 PA & OA
WGU C213 PA & OA Study Guide #2
Questions And Solutions
.
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - ANSWER -It is a government agency
Generally accepted accounting principles are - ANSWER -Developed by accounting
rule makers
The initials GAAP ...
WGU C213 PA & OA Study Guide #2
Questions And Solutions
.
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - ANSWER -It is a government agency
Generally accepted accounting principles are - ANSWER -Developed by accounting
rule makers
The initials GAAP stand for - ANSWER -Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the -
ANSWER -Financial Accounting Standards Board (FASB)
Which of the following organizations has specific legal authority to establish accounting
standards for publicly held companies? - ANSWER -Securities and Exchange
Commission (SEC)
Which of the following is NOT a service typically provided by large public accounting
firms? - ANSWER -Making management decisions
What is not a function of accounting? - ANSWER -Executing sales transactions for
organizations
What is NOT one of the three primary financial statements? - ANSWER -Statement of
retained earnings
Generally accepted accounting principles are - ANSWER -Developed by accounting
rule makers
The initials GAAP stand for - ANSWER -Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector is the -
ANSWER -Financial Accounting Standards Board (FASB)
Which of the following organizations has specific legal authority to establish accounting
standards for publicly held companies? - ANSWER -Securities and Exchange
Commission (SEC)
Which is NOT a service typically provided by large public accounting firms? - ANSWER
-Making management decisions
, The organization that develops worldwide accounting standards is the - ANSWER -
International Accounting Standards Board (IASB)
The initials CPA stand for - ANSWER -Certified Public Accountant
Which of the following financial statements reports a company's resources, obligations,
and owner's equity? - ANSWER -Balance sheet
Which of the following financial statements reports the excess of a company's revenues
over its expenses? - ANSWER -Income statement
Which of the following financial statements reports the amount of cash collected and
paid out by a company? - ANSWER -Statement of cash flows
The emphasis in financial accounting is on which of the following external user groups?
- ANSWER -Investors and creditors
The primary internal group that uses accounting information is - ANSWER -
Management
Internal reports are generally used by - ANSWER -Management
Which of the following is the most correct definition of accounting? - ANSWER -A
system for providing quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions
What is NOT typically true of accounting information? - ANSWER -The information
relates to future time periods.
Which is NOT a key component of the definition of accounting? - ANSWER -Qualitative
What is true about the double-entry system of bookkeeping? - ANSWER -It was
developed in the 1300s−1400s in Italy.
Businesses use accounting systems to - ANSWER -Analyze transactions; Handle
routine bookkeeping tasks; Evaluate performance and health of the business
Which of the following is NOT an external user of financial information? - ANSWER -
Management
The organization that develops worldwide accounting standards is the - ANSWER -
International Accounting Standards Board (IASB)
The initials CPA stand for - ANSWER -Certified Public Accountant
, Standards established by the International Accounting Standards Board are referred to
as - ANSWER -International Financial Accounting Standards
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - ANSWER -the theoretical necessity of a common set of accounting
standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices - ANSWER -True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance. - ANSWER -False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - ANSWER -Sarbanes-Oxley Act
Steps in the decision cycle from first (1) to last (5) - ANSWER -Prepare financial
statements
Analyze financial statements
Gather information
Make decision
Implement decision
What is the price-earnings (PE) ratio for this company?
Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316 - ANSWER -11.0
What does it mean if a company has a debt ratio of 101.5%? - 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? - ANSWER -Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow? - ANSWER -
$6,991/$5,486 & $5,220/$1,875
What two items of information are revealed on the balance sheet? - ANSWER -
Ownership & Debt
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