Exam (elaborations)
Exam (elaborations) CPA - Certified Public Accountant
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C213. PRE-ASSESSMENT: ACCOUNTING FOR DECISION MAKERS PVAC
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WGU C213. PRE-ASSESSMENT:ACCOUNTING FOR DECISION
MAKERS PVAC
Graded Q and A .
What does accounting focus on? - CORRECT ANSWER✅✅✅The impact a business's
activities have on its overall financial performance
Which report summarizes cash collections and cash expenditures from operating, investing, and
financing activities over a period of time? - CORRECT ANSWER✅✅✅Statement of cash
flows
Which users would have a primary concern with an organization's ability to provide healthcare
benefits? - CORRECT ANSWER✅✅✅Employees
Which body regulates a certified public accounting firm's audit practices when the firm is
auditing a large publicly traded company? - CORRECT ANSWER✅✅✅The Public
Company Accounting Oversight Board (PCAOB)
What has had the most significant impact on accounting practices? - CORRECT
ANSWER✅✅✅Information technology
What two items of information are revealed on the balance sheet?
Choose 2 answers - CORRECT ANSWER✅✅✅Ownership.
Debt
Which term is defined as the residual interest in the net assets of a company? - CORRECT
ANSWER✅✅✅Owners' 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 $36,543
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
What is the price-earnings (PE) ratio for this company? - CORRECT ANSWER✅✅✅11.0
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 form of debt should be reported in the long-term liability category? - CORRECT
ANSWER✅✅✅Notes payable expected to be paid in 18 months
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