ACCOUNTING FOR DECISION MAKERS
(C213 WGU) COMPLETE STUDY GUIDE
WITH ACTUAL EXAM QUESTIONS AND
CORRECT ANSWERS
Accounting steps. Correct Answer 1. Prepare 2. Analyze 3.
Gather 4. Make decisions 5. Implement 6. Observe.
Managerial info is inside or outside the business? Correct Answer
Inside, Internal
True or false, managerial accounting uses BOTH managerial and
financial accounting? Correct Answer True. Financial accounting
is only outside. Managerial accounting can be inside AND outside.
Financial is inside or outside the business? Correct Answer
Outside, External, includes lenders and investors
The financial statement includes what 3 documents Correct
Answer Balance sheet, income statement, and statement of cash
flows
Point in time, Assets (resources) and liabilities (obligations)
Correct Answer Balance Sheet
,Period of time (usually 1 year), amount of profit made Correct
Answer Income Statement
Period of time, where money came from, and where it went.
Inflow and outflow of cash (Cash Flows). Change in money for the
period. Correct Answer Statement of Cash flows
Assets= liabilities + equity Correct Answer Balance sheet
equation
Net income=Revenue - Expenses Correct Answer Revenue
equation
The statement of cash flows includes what three activities
Correct Answer Operating, investing, and financial activities
The decision makers in the U.S. (accounting rules) Correct
Answer FASB: Financial accounting standards. Private, no
government involvement. It is a public process, includes
individuals experienced in business and accounting (7 members).
Developed by accounting rule makers. No Legal authority.
Correct Answer GAAP: General accepted accounting principles
,We need accounting rules for... Correct Answer comparability
U.S. gov agency responsible for ensuring that investors, creditors,
and other financial statement users are provided with reliable
information. It watches behavior in financial markets. Correct
Answer SEC: Security and exchange commission. Located in
Article 1, Sec 8, Clause 3
What forms do the SEC regulate? Correct Answer Registration
statements (prospectus), Form 10-K, Form 10-Q, and schedule
14A (proxy statement). These are all publicly viewable.
What does the SEC do? Correct Answer Oversees stock
exchanges, can suspend a company, investigate and suspect
violations of the SEC rules.
Does the SEC have legal authority? Correct Answer YES. The
SEC has legal authority to establish accounting rules and
disclosure requirements.
Financial accounting rule per the US constitution Correct Answer
USA congress->SEC->FASB
The SEC created the Correct Answer FASB: Financial
accounting standards board
, FASB created Correct Answer GAAP (has no legal authority)
What sets auditory standards, continue education credits, CPA
exam, and is the code of professional conduct? Correct Answer
AIPCA: American INSTITUTE of certified public accountants.
Who is the only person who can sign audit reports? Correct
Answer Only CPA's: Certified public accountants.
The Sarbanes-Oxley Act "SOX" created? Correct Answer
PCAOB: Public company accounting oversight board.
PCAOB is under supervision of? Correct Answer Under
supervision of the SEC.
Who appoints members, approves actions, gov standards,
inspections, and investigations? It is a private group and
OVERSEES. AUDITORS? Correct Answer PCAOB: Public
Company Accounting OVERSIGHT Board.
IRS Correct Answer U.S. Gov agency that collects and regulates
income taxes. Their primary goal is to collect revenue.
(C213 WGU) COMPLETE STUDY GUIDE
WITH ACTUAL EXAM QUESTIONS AND
CORRECT ANSWERS
Accounting steps. Correct Answer 1. Prepare 2. Analyze 3.
Gather 4. Make decisions 5. Implement 6. Observe.
Managerial info is inside or outside the business? Correct Answer
Inside, Internal
True or false, managerial accounting uses BOTH managerial and
financial accounting? Correct Answer True. Financial accounting
is only outside. Managerial accounting can be inside AND outside.
Financial is inside or outside the business? Correct Answer
Outside, External, includes lenders and investors
The financial statement includes what 3 documents Correct
Answer Balance sheet, income statement, and statement of cash
flows
Point in time, Assets (resources) and liabilities (obligations)
Correct Answer Balance Sheet
,Period of time (usually 1 year), amount of profit made Correct
Answer Income Statement
Period of time, where money came from, and where it went.
Inflow and outflow of cash (Cash Flows). Change in money for the
period. Correct Answer Statement of Cash flows
Assets= liabilities + equity Correct Answer Balance sheet
equation
Net income=Revenue - Expenses Correct Answer Revenue
equation
The statement of cash flows includes what three activities
Correct Answer Operating, investing, and financial activities
The decision makers in the U.S. (accounting rules) Correct
Answer FASB: Financial accounting standards. Private, no
government involvement. It is a public process, includes
individuals experienced in business and accounting (7 members).
Developed by accounting rule makers. No Legal authority.
Correct Answer GAAP: General accepted accounting principles
,We need accounting rules for... Correct Answer comparability
U.S. gov agency responsible for ensuring that investors, creditors,
and other financial statement users are provided with reliable
information. It watches behavior in financial markets. Correct
Answer SEC: Security and exchange commission. Located in
Article 1, Sec 8, Clause 3
What forms do the SEC regulate? Correct Answer Registration
statements (prospectus), Form 10-K, Form 10-Q, and schedule
14A (proxy statement). These are all publicly viewable.
What does the SEC do? Correct Answer Oversees stock
exchanges, can suspend a company, investigate and suspect
violations of the SEC rules.
Does the SEC have legal authority? Correct Answer YES. The
SEC has legal authority to establish accounting rules and
disclosure requirements.
Financial accounting rule per the US constitution Correct Answer
USA congress->SEC->FASB
The SEC created the Correct Answer FASB: Financial
accounting standards board
, FASB created Correct Answer GAAP (has no legal authority)
What sets auditory standards, continue education credits, CPA
exam, and is the code of professional conduct? Correct Answer
AIPCA: American INSTITUTE of certified public accountants.
Who is the only person who can sign audit reports? Correct
Answer Only CPA's: Certified public accountants.
The Sarbanes-Oxley Act "SOX" created? Correct Answer
PCAOB: Public company accounting oversight board.
PCAOB is under supervision of? Correct Answer Under
supervision of the SEC.
Who appoints members, approves actions, gov standards,
inspections, and investigations? It is a private group and
OVERSEES. AUDITORS? Correct Answer PCAOB: Public
Company Accounting OVERSIGHT Board.
IRS Correct Answer U.S. Gov agency that collects and regulates
income taxes. Their primary goal is to collect revenue.
