WGU C213 Accounting for Decision Makers Final Assessment Frequently Tested Questions Complete Exam Questions with Correct Solutions||Updated Already Graded!!!

WGU C213 Accounting for Decision Makers Final Assessment Frequently Tested Questions Complete Exam Questions with Correct Solutions||Updated 2025- 2026Already Graded!!! 1) Accounting - ANSWER the recording of the day-to-day financial activities of a company and the organization of that information into summary reports used to evaluate the company's financial status 2) Conservatism - ANSWER the practice of recognizing all losses but not recognizing gains until they are certain 3) Materiality - ANSWER the concept that weighs whether a certain dollar amount is large enough to make a difference to anyone 4) Articulation - ANSWER the idea that the three primary financial statements are interrelated Debt Ratio Total Liabilities/ 5) Total Assets - ANSWER Percentage of funds needed to purchase assets that were obtained through borrowing Current Ratio Current Assets/ 6) Current Liabilities - ANSWER Measure of liquidity; number of times current assets could cover current liabilities Return on Sales Ratio Net Income/ 7) Sales - ANSWER Number of pennies earned during the year on each dollar of sales Asset Turnover Sales/ 8) Total Assets - ANSWER Number of dollars of sales during the year generated by each dollar of assets Return on Equity Net Income/ 9) Stockholder's Equity - ANSWER Number of pennies earned during the year on each dollar invested Price-earnings Ratio Market Value of Shares/ 10) Net Income - ANSWER Amount investors are willing to pay for each dollar of earnings; indication of growth potential 11) to predict a company's future profitability and cash flows to identify and improve potential problem areas - ANSWER What are the two main purposes of financial statement analysis? 12) financial ratios - ANSWER relationships between two financial statement numbers and are often used in analyzing and describing a company's performance 13) financial docs that allow comparison of financial statements across years and between companies and are prepared by dividing all financial statement numbers by sales for the year - ANSWER Common-size financial statements 14) Return on sales is computed as net income divided by sales - ANSWER In terms of ROE, define profitability. 15) Asset turnover is computed as sales divided by assets and is interpreted as the number of dollars in sales generated by each dollar of assets - ANSWER In terms of ROE, define efficiency. 16) Assets-to-equity ratio is computed as assets divided by equity and is interpreted as the number of dollars of assets a company is able to acquire using each dollar invested by stockholders - ANSWER In terms of ROE, define leverage. 17) the profitability of each dollar in sales and turnover is the degree to which assets are used to generate sales - ANSWER Margin 18) NOTE: Companies with a low margin can still earn an acceptable level of return on assets if they have a high turnover. 19) current asset - ANSWER an asset that is expected to be used within one year of the balance sheet date 20) cash, accounts receivable, and inventory - ANSWER What are the most common current assets? 21) Property, plant, and equipment (PPE) - ANSWER What are the primary long-term assets? 22) companies report the intangibles that they have purchased from other companies but not the intangibles that they have developed themselves - ANSWER Which intangible assets are reported on the balance sheet? 23) current liability - ANSWER those obligations that are expected to be paid or otherwise satisfied within one year 24) long-term bank loans, mortgages, and bonds - ANSWER What are 3 common sources of long-term debt? 25) Common stockholders are the true owners of a business; Preferred stockholders give up some of the rights of ownership enjoyed by common stockholders in exchange for some of the safety promised to creditors - ANSWER What is the difference between a common stockholder and a preferred stockholder? 26) Retained Earnings - ANSWER the cumulative amount of corporate profits that have been retained within the business rather than being paid out to stockholders as dividends 27) treasury stock - ANSWER the amount the corporation has spent to buy back its own shares from stockholders 28) 2 years, Comparative side-by-side format - ANSWER How many years worth of balance sheets does a company usually provide and how are they typically formatted? 29) Cash - ANSWER What is the first item that is usually listed on a U.S. balance sheet? 30) Long-term assets - ANSWER What is the first item that is usually listed on a non-U.S. balance sheet? 31) working capital - ANSWER The difference of current assetscurrent liabilities 32) Recognition (In terms of accounting) - ANSWER the process of condensing all estimates and judgments into one number and reporting that one number in the formal financial statements 33) disclosure - ANSWER An alternative way to report information, describing details in a narrative note 34) Transaction Analysis - ANSWER is the process of determining how an economic event impacts financial statements 35) Asset Mix - ANSWER the proportion of total assets in each asset category that is largely determined by the industry in which the company operates