WGU C213 - Accounting for Decision
Makers Questions And Answers
Accounting b- bANS-A bsystem bof bproviding b"quantitative binformation, bprimarily
bfinancial bin bnature, babout beconomic bentities bthat bis bintended bto bbe buseful bin
bmaking beconomic b
decisions."
-NUMBER b: bquantitative
b*STRENGTH bbecause bnumbers bcan bbe beasily btabulated band bsummarized. b*
bWEAKNESS bbecause bsome bimportant bbusiness bevents, bsuch bas ba btoxic bwaste
bspill b& bthe bassociated blawsuits band bcountersuits, bcannot bbe beasily bdescribed bby
bone bor btwo bnumbers.
- bA bfinancial bdimension: bThe bstatus b& bperformance bof ba bbusiness bis baffected bby
b& breflected bin bmany bdimensions—financial, bpersonal brelationships, bcommunity b&
benvironmental bimpact, b& bpublic bimage. b
Accounting bfocuses bon bjust bthe bfinancial bdimension.
- bUsefulness: bHowever, bin bspite bof bits btheoretical bbeauty, baccounting bexists bonly
bbecause bit bis buseful.
- bFuture bdecisions bbased bon bpast binformation
American bInstitute bof bCertified bPublic bAccountants b(AICPA) b- bANS-= bprofessional
borganization bof bcertified bpublic baccountants bin bthe bUnited b. b
-provides bcontinuing beducational bservice bto bits bmembers band balso bacts bas ba
bpolitical bvoice bto blobby bon bbehalf bof bits bmembership
- bresponsible bfor bpreparing band bgrading bthe bCPA bexamination bin baddition bto
bmaintaining bthe bintegrity bof bthe baccounting bprofession bthrough bits bCode bof
bProfessional bConduct.
- bCPA bfirms bare balso bhired bto bperform bindependent baudits bof ba bcompany's
bfinancial bstatements.
Balance bSheet b- bANS-Document bwhich breports bthe bresources bof ba bcompany b(the
bassets), bthe bcompany's bobligations b(the bliabilities), band bthe bowners' bequity, bwhich
brepresents bhow bmuch bmoney bhas bbeen binvested bin bthe bcompany bby bits bowners
Bookkeeping b- bANS-The bpreservation bof ba bsystematic, bquantitative brecord bof ban
bactivity
, Double bentry bsystem bof bbookkeeping b- bANS-It bwas bdeveloped bin bthe b1300s-1400s
bin bItaly
Certified bPublic bAccountant b- bANS-A bperson bwho bhas btaken ba bminimum bnumber
bof bcollege-level baccounting bclasses, bhas bpassed bthe bdreaded bCPA bexam, band
bhas bmet bother brequirements bset bby bhis bor bher bstate
Financial bAccounting b- bANS-The bname bgiven bto baccounting binformation bprovided
bfor band bused bby bEXTERNAL bUSERS
external busers b- bANS-such bas bpotential blenders band binvestors
btypically bmust brely bon bgeneral bpurpose bfinancial binformation bprovided bby bthe
bcompany
Financial bAccounting bStandards bBoard b(FASB) b- bANS-- bA bprivate bbody
bestablished b& bsupported bby bthe bjoin befforts bof bthe bU.S. bBusiness bcommunity,
bfinancial banalysts b& bpracticing baccountants.
- bset baccounting bstandards.
- b7 bboard bmembers
- bnot ba bgovernment bagency, bit blacks bthe blegal bpower bto benforce bthe baccounting
bstandards bit bsets.
GAAP b- bANS-generally baccepted baccounting bprinciples
Financial bStatements b- bANS-The bthree bprimary bfinancial binformation bdocuments:
bthe bbalance bsheet, bincome bstatement, band bstatement bof bcash bflows
Income bStatement b- bANS-reports bthe bamount bof bnet bincome bearned bby ba
bcompany bduring ba bperiod, bwith bannual band bquarterly bincome bstatements bbeing
bthe bmost bcommon
- brepresents bthe baccountant's bbest beffort bat bmeasuring bthe beconomic bperformance
bof ba bcompany
Net bincome b- bANS-is bthe bexcess bof ba bcompany's brevenues bover bits bexpenses; bif
bthe bexpenses bare bmore bthan bthe brevenues, bthen bthe bcompany bhas bsuffered ba
bloss bfor bthe bperiod.
Internal bRevenue bService b(IRS) b- bANS-The bgovernment bagency bresponsible bfor
btax bcollection band btax blaw benforcement
International bAccounting bStandards bBoard b(IASB)
Makers Questions And Answers
Accounting b- bANS-A bsystem bof bproviding b"quantitative binformation, bprimarily
bfinancial bin bnature, babout beconomic bentities bthat bis bintended bto bbe buseful bin
bmaking beconomic b
decisions."
-NUMBER b: bquantitative
b*STRENGTH bbecause bnumbers bcan bbe beasily btabulated band bsummarized. b*
bWEAKNESS bbecause bsome bimportant bbusiness bevents, bsuch bas ba btoxic bwaste
bspill b& bthe bassociated blawsuits band bcountersuits, bcannot bbe beasily bdescribed bby
bone bor btwo bnumbers.
- bA bfinancial bdimension: bThe bstatus b& bperformance bof ba bbusiness bis baffected bby
b& breflected bin bmany bdimensions—financial, bpersonal brelationships, bcommunity b&
benvironmental bimpact, b& bpublic bimage. b
Accounting bfocuses bon bjust bthe bfinancial bdimension.
- bUsefulness: bHowever, bin bspite bof bits btheoretical bbeauty, baccounting bexists bonly
bbecause bit bis buseful.
- bFuture bdecisions bbased bon bpast binformation
American bInstitute bof bCertified bPublic bAccountants b(AICPA) b- bANS-= bprofessional
borganization bof bcertified bpublic baccountants bin bthe bUnited b. b
-provides bcontinuing beducational bservice bto bits bmembers band balso bacts bas ba
bpolitical bvoice bto blobby bon bbehalf bof bits bmembership
- bresponsible bfor bpreparing band bgrading bthe bCPA bexamination bin baddition bto
bmaintaining bthe bintegrity bof bthe baccounting bprofession bthrough bits bCode bof
bProfessional bConduct.
- bCPA bfirms bare balso bhired bto bperform bindependent baudits bof ba bcompany's
bfinancial bstatements.
Balance bSheet b- bANS-Document bwhich breports bthe bresources bof ba bcompany b(the
bassets), bthe bcompany's bobligations b(the bliabilities), band bthe bowners' bequity, bwhich
brepresents bhow bmuch bmoney bhas bbeen binvested bin bthe bcompany bby bits bowners
Bookkeeping b- bANS-The bpreservation bof ba bsystematic, bquantitative brecord bof ban
bactivity
, Double bentry bsystem bof bbookkeeping b- bANS-It bwas bdeveloped bin bthe b1300s-1400s
bin bItaly
Certified bPublic bAccountant b- bANS-A bperson bwho bhas btaken ba bminimum bnumber
bof bcollege-level baccounting bclasses, bhas bpassed bthe bdreaded bCPA bexam, band
bhas bmet bother brequirements bset bby bhis bor bher bstate
Financial bAccounting b- bANS-The bname bgiven bto baccounting binformation bprovided
bfor band bused bby bEXTERNAL bUSERS
external busers b- bANS-such bas bpotential blenders band binvestors
btypically bmust brely bon bgeneral bpurpose bfinancial binformation bprovided bby bthe
bcompany
Financial bAccounting bStandards bBoard b(FASB) b- bANS-- bA bprivate bbody
bestablished b& bsupported bby bthe bjoin befforts bof bthe bU.S. bBusiness bcommunity,
bfinancial banalysts b& bpracticing baccountants.
- bset baccounting bstandards.
- b7 bboard bmembers
- bnot ba bgovernment bagency, bit blacks bthe blegal bpower bto benforce bthe baccounting
bstandards bit bsets.
GAAP b- bANS-generally baccepted baccounting bprinciples
Financial bStatements b- bANS-The bthree bprimary bfinancial binformation bdocuments:
bthe bbalance bsheet, bincome bstatement, band bstatement bof bcash bflows
Income bStatement b- bANS-reports bthe bamount bof bnet bincome bearned bby ba
bcompany bduring ba bperiod, bwith bannual band bquarterly bincome bstatements bbeing
bthe bmost bcommon
- brepresents bthe baccountant's bbest beffort bat bmeasuring bthe beconomic bperformance
bof ba bcompany
Net bincome b- bANS-is bthe bexcess bof ba bcompany's brevenues bover bits bexpenses; bif
bthe bexpenses bare bmore bthan bthe brevenues, bthen bthe bcompany bhas bsuffered ba
bloss bfor bthe bperiod.
Internal bRevenue bService b(IRS) b- bANS-The bgovernment bagency bresponsible bfor
btax bcollection band btax blaw benforcement
International bAccounting bStandards bBoard b(IASB)
