Accounting for decision makers C213 WGU Final Exam Questions and Complete Solutions

1. Prepare 2. Analyze 3. Gather 4. Make decisions 5. Implement 6. Observe. Accounting steps. Inside, Internal Managerial info is inside or outside the business? True. Financial accounting is only outside. Managerial accounting can be inside AND outside. True or false, managerial accounting uses BOTH managerial and financial accounting? Outside, External, includes lenders and investors Financial is inside or outside the business? Balance sheet, income statement, and statement of cash flows The financial statement includes what 3 documents Balance Sheet Point in time, Assets (resources) and liabilities (obligations) Income Statement Period of time (usually 1 year), amount of profit made Statement of Cash flows Period of time, where money came from, and where it went. Inflow and outflow of cash (Cash Flows). Change in money for the period. Balance sheet equation Assets= liabilities + equity Revenue equation Net income=Revenue - Expenses Operating, investing, and financial activities The statement of cash flows includes what three activities FASB: Financial accounting standards. Private, no government involvement. It is a public process, includes individuals experienced in business and accounting (7 members). The decision makers in the U.S. (accounting rules) GAAP: General accepted accounting principles Developed by accounting rule makers. No Legal authority.