WGU Accounting Study Guide Exam Questions And Actual Answers.
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Course
Wgu cpa
Institution
Wgu Cpa
Financial Accounting Standards Board (FASB) - Answer Who the accounting standards are set by
Securities and Exchange Commission (SEC) - Answer Regulates U.S. stock exchanges, full & fair information, provides comfort in buying and selling stocks
American Institute of Certified Public Ac...
WGU Accounting Study Guide Exam
Questions And Actual Answers.
Financial Accounting Standards Board (FASB) - Answer Who the accounting standards are set by
Securities and Exchange Commission (SEC) - Answer Regulates U.S. stock exchanges, full & fair
information, provides comfort in buying and selling stocks
American Institute of Certified Public Accountants (AICPA) - Answer Generally Accepted Accounting
Principles (GAAP)-Professional Organization of CPA's in U.S., continuing educational service to its
members, political voice lobby on behalf of its members
Generally Accepted Accounting Principles (GAAP) - Answer Accounting rules
Public Company Accounting Oversight Board (PCAOB) - Answer Created by SEC, ends self-regulation,
can investigate, register and discipline auditors
Internal Revenue Service (IRS) - Answer Government agency responsible for tax collection & tax law
enforcement
International Accounting Standards Board (IASB) - Answer An independent international body formed
to develop worldwide accounting standards
International Financial Reporting Standards (IFRS) - Answer The accounting standards produced by the
IASB.
What is accounting and why does it exist? - Answer Accounting is formally defined as a system of
providing "quantitate information, primarily financial in nature, about economic entities that is intended
to be used in make economic decisions. Only way for business to flourish and grow.
What are the three primary financial statements? - Answer balance sheet, income statement,
statement of cash flows
,What is the purpose of each primary financial statement? - Answer Balance Sheet:
Reports resources of company (assets), obligations (liabilities), & owner's equity Income Statement:
Net income during a period (annually and quarterly)
Statement of Cash Flows:
Cash collected and paid out by a company
Who are the nine primary users of financial accounting information? - Answer Lenders
Investors
Management
Suppliers & Customers
Employees
Competitors
Government Agencies
Politicians
Press
Why do the nine primary users need the financial information? - Answer Financial accounting
information is organized & distributed to outside parties who are interested in a company's financial
statements
What is the difference between financial accounting and managerial accounting? - Answer Financial:
External users
Managerial: Internal users
Who is the current standard-setting board for accounting in the private sector? - Answer Financial
Accounting Standards Board
(FASB)
, Which organization or entity is charged with developing worldwide accounting practices? - Answer
International Accounting Standard Board (IASB)
In 2002, which act of congress increased federal oversight of the audit process? - Answer Sarbanes-
Oxley
Liquidity - Answer Order assets are listed (most liquid to least liquid)
Retained earnings - Answer Represent the portion of stockholder's equity (resulting from cumulative
profitable operations) that has not been paid to the owners as dividends
Revenue recognition - Answer A GAAP that determines the specific conditions in which revenues is
recognized or accounted for
Relevance - Answer A qualitive characteristics in accounting. Relevance is associated with information
that is timely, useful, has predictive value, & is going to make a difference to a decision maker
Reliability - Answer A qualitive characteristics in accounting. It is achieved when information is
verifiable, objective (not subjective) and you can depend on it.
Comparability - Answer Information that becomes much more useful when it can be related to a
benchmark or standard.
Consistency - Answer Principle states, once you adopt an accounting principle or method, continue to
follow it consistently in future accounting periods
Conservatism - Answer Pervasive factor in accounting, can be summarized as follows; when in doubt,
recognize all losses, but don't recognize any gains
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