WGU C213 PA & OA Study Guide Exam comprehensive questions |
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
SOLUTIONS
What does accounting focus on? - (ANSWER)The impact a business's activities have on its overall
financial performance
Which report summarizes cash collections and cash expenditures from operating, investing, and
financing activities over a period of time? - (ANSWER)Statement of cash flows
Which users would have a primary concern with an organization's ability to provide healthcare benefits?
- (ANSWER)Employees
Which benefit does a corporation gain by following Generally Accepted Accounting Principles (GAPP)? -
(ANSWER)An increase in its compatibility to other companies
Which body regulates a certified public accounting firm's audit practices when the firm is auditing a
large publicly traded company? - (ANSWER)The Public Company Accounting Oversight Board (PACOB)
What has had the most significant impact on Accounting practices? - (ANSWER)Information technology
What two items of information are revealed on the balance sheet? - (ANSWER)Ownership and Debt
Which term is defined as the residual in the net assets of a company? - (ANSWER)Owners equity
Which situation should result in revenue recognition on the income statement for the year ending
12/31/14 if the firm is using accrual accounting? - (ANSWER)In 2014, a company provides services to a
customer for which cash will be collected the next year (2015).
Which category on the statement of cash flows summarizes cash receipts and payments to owners and
creditors of the company? - (ANSWER)Cash from financing activities
,WGU C213 PA & OA Study Guide Exam comprehensive questions |
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
SOLUTIONS
Where would an investor find a summary of a company's significant accounting policies? - (ANSWER)In
the notes to financial statements
Which assurance does an external audit report provide for its readers? - (ANSWER)The company's
financial statements fairly reflect its financial position
Information that can be verified - (ANSWER)Reliable
Information having to do with the matter at hand - (ANSWER)Relevant
Information that is important enough to make a difference - (ANSWER)Material
Information related to recognizing losses as they occur - (ANSWER)Conservatism
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
Which form of debt should be reported in the long-term liability category? - (ANSWER)Notes payable
expected to be paid in 18 months
Which values affect the measurement of net income? - (ANSWER)Operating expenses &
Ordinary gains and losses
Which items' subtotals are included in a multi-step income statement? - (ANSWER)Gross profit &
Income from operations
, WGU C213 PA & OA Study Guide Exam comprehensive questions |
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
SOLUTIONS
What is a common category in a statement of cash flows? - (ANSWER)Cash from investing activities
Which cash flow category would include "cash received from investors"? - (ANSWER)Cash from financing
activities
Which item is an investing activity? - (ANSWER)Cash payments for purchase of plant assets
What impact does the sale of equipment have on the statement of cash flows? - (ANSWER)Increase in
cash from investing activities
What is known about the direct and indirect methods of preparing statements of cash flow? -
(ANSWER)The indirect method is more popular among large U.S. companies
Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an
invoice that includes more items than were actually received? - (ANSWER)The inventory department
counts and inspects items as received and forwards the receiving record to accounts payable.
What are common reasons for managers to manipulate reported earnings? - (ANSWER)Pressure to meet
internal sales goals &
Preparing to qualify for a bank loan
Which requirements must accounting firms that audit public companies meet under the Sarbanes-Oxley
Act? - (ANSWER)Firms must not provide certain non-audit services to audit clients, such as management
functions or legal services. &
Firms must report to and be retained by the audit committee rather than the CFO or other company
management.
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
SOLUTIONS
What does accounting focus on? - (ANSWER)The impact a business's activities have on its overall
financial performance
Which report summarizes cash collections and cash expenditures from operating, investing, and
financing activities over a period of time? - (ANSWER)Statement of cash flows
Which users would have a primary concern with an organization's ability to provide healthcare benefits?
- (ANSWER)Employees
Which benefit does a corporation gain by following Generally Accepted Accounting Principles (GAPP)? -
(ANSWER)An increase in its compatibility to other companies
Which body regulates a certified public accounting firm's audit practices when the firm is auditing a
large publicly traded company? - (ANSWER)The Public Company Accounting Oversight Board (PACOB)
What has had the most significant impact on Accounting practices? - (ANSWER)Information technology
What two items of information are revealed on the balance sheet? - (ANSWER)Ownership and Debt
Which term is defined as the residual in the net assets of a company? - (ANSWER)Owners equity
Which situation should result in revenue recognition on the income statement for the year ending
12/31/14 if the firm is using accrual accounting? - (ANSWER)In 2014, a company provides services to a
customer for which cash will be collected the next year (2015).
Which category on the statement of cash flows summarizes cash receipts and payments to owners and
creditors of the company? - (ANSWER)Cash from financing activities
,WGU C213 PA & OA Study Guide Exam comprehensive questions |
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
SOLUTIONS
Where would an investor find a summary of a company's significant accounting policies? - (ANSWER)In
the notes to financial statements
Which assurance does an external audit report provide for its readers? - (ANSWER)The company's
financial statements fairly reflect its financial position
Information that can be verified - (ANSWER)Reliable
Information having to do with the matter at hand - (ANSWER)Relevant
Information that is important enough to make a difference - (ANSWER)Material
Information related to recognizing losses as they occur - (ANSWER)Conservatism
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
Which form of debt should be reported in the long-term liability category? - (ANSWER)Notes payable
expected to be paid in 18 months
Which values affect the measurement of net income? - (ANSWER)Operating expenses &
Ordinary gains and losses
Which items' subtotals are included in a multi-step income statement? - (ANSWER)Gross profit &
Income from operations
, WGU C213 PA & OA Study Guide Exam comprehensive questions |
FREQUENTLY MOST TESTED QUESTIONS AND VERIFIED
SOLUTIONS
What is a common category in a statement of cash flows? - (ANSWER)Cash from investing activities
Which cash flow category would include "cash received from investors"? - (ANSWER)Cash from financing
activities
Which item is an investing activity? - (ANSWER)Cash payments for purchase of plant assets
What impact does the sale of equipment have on the statement of cash flows? - (ANSWER)Increase in
cash from investing activities
What is known about the direct and indirect methods of preparing statements of cash flow? -
(ANSWER)The indirect method is more popular among large U.S. companies
Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an
invoice that includes more items than were actually received? - (ANSWER)The inventory department
counts and inspects items as received and forwards the receiving record to accounts payable.
What are common reasons for managers to manipulate reported earnings? - (ANSWER)Pressure to meet
internal sales goals &
Preparing to qualify for a bank loan
Which requirements must accounting firms that audit public companies meet under the Sarbanes-Oxley
Act? - (ANSWER)Firms must not provide certain non-audit services to audit clients, such as management
functions or legal services. &
Firms must report to and be retained by the audit committee rather than the CFO or other company
management.
