C928 - WGU IT Finance (Lesson Summaries). Questions & Answers. VERIFIED// 2024/25 Exam PREDICTOR PAPER

C928 - WGU IT Finance (Lesson Summaries). Questions & Answers. VERIFIED What is a business? (Lesson 1) - -A business provides goods or services (outputs) to customers with the objective of earning a profit. Three types of businesses include service, merchandising, and manufacturing businesses. Accounting is an information system that provides reports to users about the economic activities and condition of a business. Ethics are moral principles that guide the conduct of individuals. Good ethical conduct depends on individual character and company culture. Accountants are engaged in private accounting or public accounting. What are the main accounting standards and regulatory boards? (Lesson 1) - -Generally accepted accounting principles (GAAP) are used in preparing financial statements. To be useful, financial reports should provide information that is relevant and a faithful representation of the economic activity or condition. GAAP is based upon the assumptions of monetary unit, time period, business entity, and going concern. The principles of measurement, historical cost, revenue recognition, and expense recognition are an integral part of GAAP. The Financial Standards Board (FASB), Security and Exchange Commission (SEC), and International Accounting Standards Board (IASB) develop standards that are incorporated into GAAP. How are the resources of a business and claims stated? (Lesson 1) - -The resources owned by a business and the rights or claims to these resources may be stated in the form of an equation, as follows: Assets = Liabilities + Equity How are business transactions stated? (Lesson 1) - -All business transactions can be stated in terms of the change in one or more of the three elements of the accounting equation. What are the primary finacial statements and reports used by businesses? (Lesson 1) - -The primary financial statements of a corporation are the income statement, the retained earnings statement, the balance sheet, and the statement of cash flows. The income statement reports a period's net income or net loss, which is also reported on the retained earnings statement. The ending retained earnings reported on the retained earnings statement is also reported on the balance sheet. The ending cash balance is reported on the balance sheet and the statement of cash flows. End-of-period account adjustment process. (Lesson 2) - -Exhibit 1 illustrates the end-of-period process by which accounts are adjusted and how the adjusted accounts flow into the financial statements. The use of the end-of-period spreadsheet to produce other reports and statements. (Lesson 2) - - Using the end-of-period spreadsheet shown in Exhibit 1, the income statement, retained earning