WGU C213 Final Exam
Assets are listed in the order of liquid-
ity. Liquidity is the amount of time it
would usually take to covert an asset
into cash. Obviously, cash would be list-
ed first, followed by marketable invest-
ments (a company can quickly convert
a short-term investment into cash). Ac-
counts receivable would be listed next
followed by inventory, and long-term in-
vestments, fixed assets, and intangibles.
Current assets are listed before
Order of assets listed on the balance
long-term assets.
sheet
Current liabilities are listed before
long-term liabilities, but there is no spe-
cific order they are listed in outside of
current and long-term.
There is also no specific order equi-
ty accounts are listed on the balance
sheet; although, typically you will see
paid-in-capital followed by retained earn-
ings followed by accumulated other com-
prehensive income, and lastly, treasury
stock.
Difference between a manufacturing
company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead The only difference is - a manufacturing
company has direct materials (invento-
ry).
Manufacturing Co Selling Costs Direct
Labor
Administrative Costs Manufacturing
Overhead
Direct Materials (inventory
Evaluating a historical income statement
to project a future income statement.
, WGU C213 Final Exam
Projected growth for 2017 = 10% in-
crease over 2016 sales.
Step 1: Convert the income statement
into a common-sized income statement. Calculation for 2016: 110,.10 =
Step 2: Multiply 2016 sales by 1.10 (10% 100,000
growth) to get the forecasted 2017 sales.
Then multiply the projected 2017 sales
by the percentages from step 1.
Now, what would you do if you were giv-
en the 2017 sales figure and you need to
calculate the 2016 sales figure based off
the 10% growth for 2017?
Regulates the U.S. Stock exchanges.
Seeks to create a fair information envi-
ronment in which investors can buy and
sell stocks.
Congress created the first securities act
in 1933 and the second securities act
in 1934 in response to the stock market
crash of 1929.
The Securities Act of 1933 requires most
Role of the U. S. Securities and Ex-
companies planning to issue new debt or
change Commission (SEC) in financial
stock securities to the public to submit
reporting.
a registration statement to the public for
approval.
The Securities Act of 1934 requires a
public company to file detailed periodic
reports including audited financial state-
ments (form 10-K is the annual report;
Form 10-Q is the quarterly report).
Granted the legal authority to estab-
lish accounting standards. Currently the
SEC accepts the pronouncements set by
, WGU C213 Final Exam
FASB.
The SEC can suspend trading of a com-
pany's stock, and if hearings show that
the issue failed to comply with the secu-
rities laws, the SEC can de-list the secu-
rity.
Congress strengthened the SEC through
the enactment of Sarbanes-Oxley
(SOX), which was enacted after the mas-
sive frauds that occurred in the late
1990s and the early 2000s.
ABC is a more accurate product costing
system than traditional product costing
systems.
ABC requires more time and expense
to administer than do traditional costing
Compare and Contrast Traditional Cost-
systems.
ing to Activity-Based Costing (ABC).
Companies with diverse products in-
volving substantially different production
processes, an ABC system yields better
cost data and better management deci-
sions.
Fixed costs (FC) are fixed in total, but as
sales volume increases, the per unit FC
decreases.
Variable costs (VC) are fixed per unit,
Describe how basic cost behavior pat- but as sales volume increases, total VC
terns change as sales volumes change. increases.
Stewart Manufacturing produces and
sells die cast race cars. VC for each die
cast car is $3 and total FC are $300,000
Assets are listed in the order of liquid-
ity. Liquidity is the amount of time it
would usually take to covert an asset
into cash. Obviously, cash would be list-
ed first, followed by marketable invest-
ments (a company can quickly convert
a short-term investment into cash). Ac-
counts receivable would be listed next
followed by inventory, and long-term in-
vestments, fixed assets, and intangibles.
Current assets are listed before
Order of assets listed on the balance
long-term assets.
sheet
Current liabilities are listed before
long-term liabilities, but there is no spe-
cific order they are listed in outside of
current and long-term.
There is also no specific order equi-
ty accounts are listed on the balance
sheet; although, typically you will see
paid-in-capital followed by retained earn-
ings followed by accumulated other com-
prehensive income, and lastly, treasury
stock.
Difference between a manufacturing
company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead The only difference is - a manufacturing
company has direct materials (invento-
ry).
Manufacturing Co Selling Costs Direct
Labor
Administrative Costs Manufacturing
Overhead
Direct Materials (inventory
Evaluating a historical income statement
to project a future income statement.
, WGU C213 Final Exam
Projected growth for 2017 = 10% in-
crease over 2016 sales.
Step 1: Convert the income statement
into a common-sized income statement. Calculation for 2016: 110,.10 =
Step 2: Multiply 2016 sales by 1.10 (10% 100,000
growth) to get the forecasted 2017 sales.
Then multiply the projected 2017 sales
by the percentages from step 1.
Now, what would you do if you were giv-
en the 2017 sales figure and you need to
calculate the 2016 sales figure based off
the 10% growth for 2017?
Regulates the U.S. Stock exchanges.
Seeks to create a fair information envi-
ronment in which investors can buy and
sell stocks.
Congress created the first securities act
in 1933 and the second securities act
in 1934 in response to the stock market
crash of 1929.
The Securities Act of 1933 requires most
Role of the U. S. Securities and Ex-
companies planning to issue new debt or
change Commission (SEC) in financial
stock securities to the public to submit
reporting.
a registration statement to the public for
approval.
The Securities Act of 1934 requires a
public company to file detailed periodic
reports including audited financial state-
ments (form 10-K is the annual report;
Form 10-Q is the quarterly report).
Granted the legal authority to estab-
lish accounting standards. Currently the
SEC accepts the pronouncements set by
, WGU C213 Final Exam
FASB.
The SEC can suspend trading of a com-
pany's stock, and if hearings show that
the issue failed to comply with the secu-
rities laws, the SEC can de-list the secu-
rity.
Congress strengthened the SEC through
the enactment of Sarbanes-Oxley
(SOX), which was enacted after the mas-
sive frauds that occurred in the late
1990s and the early 2000s.
ABC is a more accurate product costing
system than traditional product costing
systems.
ABC requires more time and expense
to administer than do traditional costing
Compare and Contrast Traditional Cost-
systems.
ing to Activity-Based Costing (ABC).
Companies with diverse products in-
volving substantially different production
processes, an ABC system yields better
cost data and better management deci-
sions.
Fixed costs (FC) are fixed in total, but as
sales volume increases, the per unit FC
decreases.
Variable costs (VC) are fixed per unit,
Describe how basic cost behavior pat- but as sales volume increases, total VC
terns change as sales volumes change. increases.
Stewart Manufacturing produces and
sells die cast race cars. VC for each die
cast car is $3 and total FC are $300,000
