WGU D074 Quizzes | 170 Questions with 100% Correct Answers | Verified | Latest Update | 21 Pages

WGU D074 Quizzes | 170 Questions with 100% Correct Answers | Verified | Latest Update | 21 Pages Your boss approaches you with a concerning letter from the IRS and asks you to explain the role of the IRS in regulating accounting standards. Based on the role of the IRS, what could be the problem detailed in the letter? - Answer ️️ -The company has not filed its taxes in accordance with the law. Anika is considering investing in a tech company that is known for developing smart home appliances. Before investing, Anika first wants to ensure that the company's past financial performance has been satisfactory and that the company manages its cash flows well. What type of accounting information would provide this evidence for Anika? - Answer ️️ -Financial Reports Alliah Company just released its public accounting data for 20X9. Which user of accounting information will monitor this data to ensure that the company is providing sufficient information for investors? - Answer ️️ -Government Agencies (this is the role of the SEC) A new product line manager approaches the accounting department in order to understand the past performance of the product line he has been asked to manage in the future. Which role of accounting involves obtaining and using financial information to determine the financial health and performance of a business or product line? - Answer ️️ -Evaluation You read int he newspaper that a local company you are familiar with has been found guilty in court of publishing financial statements that are false and misleading to users of those financial statements. In this situation, what could the American Institute of Certified Public Accountants (AICPA) do in response to the accountants who were found guilty of unethical conduct in accounting practices? - Answer ️️ -Implement professional sanctions In the context of the financial accounting cycle, what is the definition of an account? - Answer ️️ -A specific accounting record that provides an efficient way to categorize similar types of transactions Which event represents a transaction recorded as part of the financial accounting cycle? - Answer ️️ -The sale of a product for cash or on account. A company sells a product to a customer on account. Which part(s) of the accounting equation does this particular transaction change? - Answer ️️ -Both assets and owners' equity What is an example of an internal transaction? - Answer ️️ -An employee is transferred from one department to another. Which item is a lilability? - Answer ️️ -Mortgage Which item listed should be recorded as an external transaction? - Answer ️️ -Purchases of inventory from suppliers What is the effect of borrowing money from the bank for the next accounting period on company's books? - Answer ️️ -Cash (an asset) and a liability account both increase One activity most businesses have in common is the acquisition of resources. Which example is an external transaction where a business is acquiring a resource? - Answer ️️ -Purchasing new equipment from a manufacturer. Which account is an example of an asset? - Answer ️️ -Accounts receivable Which statement describes the role of ethics in accounting? - Answer ️️ -Accountants have a moral incentive to conduct themselves ethically Which statement below describes why you should study accounting? - Answer ️️ -At some point in my career, I will need to use accounting information to make a business decision. How do revenues and expenses fit into the accounting equation? - Answer ️️ -Revenues minus expenses equals net income, which is part of owners' equity. What is the name of the account that shows the distribution of net income (earnings) to the owners of a business? - Answer ️️ -Dividends A transaction involving the payment of dividends to the owners reduces which part of the accounting equation? - Answer ️️ -Owners' equity Which event is an example of an internal transaction? - Answer ️️ -A company hires a new employee. Your company purchases new equipment for cash. Which accounts are increased and decreased as a result of this transaction? - Answer ️️ -Equipment increases and cash decreases What is the one simple rule that always applies to the accounting equation? - Answer ️️ -The accounting equation must always remain in balance after recording a transaction. Which account is an example of a liability? - Answer ️️ -Accounts Payable Which of the primary financial statements reports the amount of cash collected and paid out by a company? - Answer ️️ -Statement of cash flows What is the name for the authoritative set of accounting standards in the United States? - Answer ️️ -GAAP Which statement is a correct description of the IASB? - Answer ️️ -It establishes international accounting standards Which action is part of the financial accounting cycle? - Answer ️️ -Summarizing the financial information in financial statements What is owners' equity? - Answer ️️ -The remaining claim to the assets of a business after liabilities have been deducted Most businesses have a systemic method for analyzing transactions and collecting and recording transaction-related information. This transformation process is which part of accounting? - Answer ️️ -The accounting cycle Which event is an example of collecting, analyzing, and summarizing accounting information? - Answer ️️ -Gathering checkbook information Which accounting transaction should be recorded in the books and the records of a company? - Answer ️️ -Purchasing new equipment for the company. Why do the notes to the financial statements contain additional information about summary totals? - Answer ️️ -Because one summary number in the financial statements represents literally thousands of individual items Why do the notes to the financial statements contain a summary of significant accounting policies? - Answer ️️ -Because accounting involves making assumptions, estimates, and judgements Information about accounting policies and practices, including assumptions, estimates, and judgements, are included in which element of the financial statements? - Answer ️️ -The notes to the financial statements What is the purpose of a classified balance sheet? - Answer ️️ -A classified balance sheet distinguishes between current and long-term asse