WGU C213 PRE-ASSESSMENT: ACCOUNTING FOR DECISION MAKERS PVAC 2022/2023
1. What does accounting focus on(answer) The impact a business's activities
... [Show More] have on its overall financial performance
2. Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time(answer) State- ment of cash flows
3. Which users would have a primary concern with an organization's ability to provide healthcare benefits(answer) Employees
4. Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company(answer) The Public Com- pany Accounting Oversight Board (PCAOB)
5. What has had the most significant impact on accounting practices(answer) Infor- mation technology
6. What two items of information are revealed on the balance sheet?
Choose 2 answers: Ownership.
Debt
7. Which term is defined as the residual interest in the net assets of a company(answer) Owners' equity
8. 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(answer) $350 million
9. Which situation should result in revenue recognition on the income state- ment for the year ending 12/31/14 if the firm is using accrual-basis account- ing(answer) In 2014, a company provides services to a customer for which cash will be collected the next year (2015).
10. Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company(answer) Cash flows from financing activities
11. Where would an investor find a summary of a company's significant accounting policies(answer) In the notes to financial statements
12. Which assurance does an external audit report provide for its readers?-
: The company's financial statements fairly reflect its financial position
13. Reliable: Information that can be verified
14. Relevant: Information having to do with the matter at hand
15. Material: Information that is important enough to make a difference
16. Conservatism: Information related to recognizing losses as they occur
17. steps in the decision cycle: 1 Prepare financial statements.
2 Analyze financial statements.
3 Gather information. 4 Make decision.
5 Implement decision
18. 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(answer) 11.0
19. 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
20. Which two cash flow adequacy ratios represent a cash cow(answer) - $6,991/$5,486. $5,220/$1,875.
21. Which formula yields a cash times interest earned ratio of
11(answer) Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
22. Which form of debt should be reported in the long-term liability catego- ry(answer) Notes payable expected to be paid in 18 months
23. In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred:
January 1
The corporation received $1,000,000 in cash in exchange for stock issued to stockholders.
January 3
The corporation borrowed $250,000 from bank. The loan is a four-year loan
with an interest rate of 12 percent, payable each year on January 1 beginning in year 2.
January 5
The corporation purchased equipment to be used in the business for $200,000 cash.
January 8
The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers.
January 15
The corporation hired five employees. Each employee will be paid $1,000 at the end of each month.
January 30
The corporation paid $6,000 cash for a one-year insurance policy. The policy period will begin on February 1, year 1.
What will be the impact of the January 5 event on the company's balance sheet on that date(answer) Equipment will increase $200,000, and cash will decrease $200,000.
24. In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred:
January 1
The corporation received $1,000,000 in cash in exchange for stock issued to stockholders.
January 3
The corporation borrowed $250,000 from a bank. The loan is a four-year loan with an interest rate of 12 percent, payable each year on January 1 beginning in year 2.
January 5
The corporation purchased equipment to be used in the business for $200,000 cash.
January 8
The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers.
January 15
The corporation hired five employees. Each employee will be paid $1,000 at the end of each month.
January 31
The corporation paid $6,000 cash for a one-year insurance policy. The policy period will begin on February 1, year 1.
What will be the impact of the January 31 event on the company's balance sheet on that date(answer) Prepaid insurance will increase $6,000, and cash will de- crease $6,000.
25. Which two values affect the measurement of net income?
Choose 2 answers: Ordinary gains and losses . Operating expenses
26. Which two items' subtotals are included in a multi-step income state- ment?
Choose 2 answers: Gross profit. Income from operations
27. A furniture company using accrual accounting purchased 20 sofas in
November 2011. In December 2011, 8 of the 20 sofas were sold to customers.
The customers all signed contracts agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012. At the time of sale, the company was reasonably sure the customers would pay the amount owed.
The furniture company pays its salespeople a commission on each sofa sold, with commissions for December 2011 sales paid in January 2012.
The furniture company paid $3,000 for advertising that ran in the local newspaper in November 2011.
In which month should advertising costs be expensed(answer) November
five years. At the time of purchase, the company also purchased a one-year insurance policy on this equipment, which cost $6,000. [Show Less]