WGU C213 PRE-ASSESSMENT: ACCOUNTING FOR DECISION MAKERS
PVAC
2022/2023
1. What does accounting focus on(answer) The impact a business's activities
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
PVAC
2022/2023
1. What does accounting focus on(answer) The impact a business's activities
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
