WGU C213 Final Exam | 73 Questions And Answers
Order of assets listed on the balance sheet Correct Ans ➡ Assets are
listed in the order of liquidity.
... [Show More] Liquidity is the amount of time it would usually
take to covert an asset into cash. Obviously, cash would be listed first,
followed by marketable investments (a company can quickly convert a shortterm investment into cash). Accounts receivable would be listed next
followed by inventory, and long-term investments, fixed assets, and
intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no
specific order they are listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance
sheet; although, typically you will see paid-in-capital followed by retained
earnings followed by accumulated other comprehensive income, and lastly,
treasury stock.
Difference between a manufacturing company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead
Manufacturing Co Selling Costs Direct Labor
Administrative Costs Manufacturing Overhead
Direct Materials (inventory Correct Ans ➡ The only difference is - a
manufacturing company has direct materials (inventory).
Evaluating a historical income statement to project a future income
statement.
Projected growth for 2017 = 10% increase over 2016 sales.
Step 1: Convert the income statement into a common-sized income
statement.
Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the forecasted 2017
sales. Then multiply the projected 2017 sales by the percentages from step
1.
Now, what would you do if you were given the 2017 sales figure and you
need to calculate the 2016 sales figure based off the 10% growth for 2017?
Correct Ans ➡ Calculation for 2016: 110,000 / 1.10 = 100,000
Role of the U. S. Securities and Exchange Commission (SEC) in financial
reporting. Correct Ans ➡ Regulates the U.S. Stock exchanges.
Seeks to create a fair information environment in which investors can buy
and sell stocks.
Congress created the first securities act in 1933 and the second securities
act in 1934 in response to the stock market crash of 1929.
The Securities Act of 1933 requires most companies planning to issue new
debt or stock securities to the public to submit a registration statement to
the public for approval.
The Securities Act of 1934 requires a public company to file detailed periodic
reports including audited financial statements (form 10-K i [Show Less]