WGU C213 OA Prep Actual Exam
Questions and Guide Answers
100% Verified Graded A+
1. The ability a company has to pay its debts in the short run is its
Answer: Liquidity
2. Which of the following is a measure of the liquid position of a corporation?-
Answer: Debt ratio
3. Which of the following ratios is used to measure a firm's leverage?
Answer: Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm?
Answer: Return on Equity
,5. The emphasis in financial accounting is on which of the following external
user groups?
Answer: Investors and creditors
6. The primary internal group that uses accounting information is
Answer: Management
7. Internal reports are generally used by
Answer: Management
8. Which of the following is NOT an external user of financial information?
Answer: Man- agement
9. Which of the following is NOT true of the Financial Accounting Standards
Board (FASB)?
Answer: It is a government agency
10. Generally accepted accounting principles are
Answer: Developed by accounting rule makers
11. The initials GAAP stand for
Answer: Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private sector is
the
Answer: Financial Accounting Standards Board (FASB)
,13. The organization that develops worldwide accounting standards is the
Answer: In- ternational Accounting Standards Board (IASB)
14. The initials CPA stand for
Answer: Certified Public Accountant
15. Which of the following is NOT a service typically provided by large public
accounting firms?
Answer: Making management decisions
16. Standards established by the International Accounting Standards Board are
referred to as
Answer: International Financial Reporting Standards
17. Which of the following is the government agency that stipulates the rules
and regulations that govern the collection of taxes in the United States?
Answer: Internal Revenue Service
18. Which of the following is NOT a reason for the integration of worldwide
accounting standards?
Answer: the theoretical necessity of a common set of accounting standards
19. The International Accounting Standards Board (IASB) is charged with devel-
oping worldwide accounting practices?
Answer: True
, 20. With the current state of information technology, investors outside a com-
pany are now allowed access to a company's internal database of financial in-
formation and do their own customized analysis of a firm's performance.
Answer: False
21. Increased federal oversight of the audit process resulted from the passage
of the following act of Congress –
Answer: Sarbanes-Oxley Act
22. A borrower benefits from providing financial information regarding income
and expenses in the form of a lower interest rate on the loan because of
reduced uncertainty for the lender with regard to repayment.
Answer: True
23. Which of the following is NOT one of the three primary financial state-
ments?
Answer: The Statement of Retained Earnings
24. One reason for a company's preparing and providing financial statements
is to reduce uncertainty for an investor regarding the firm's future financial
performance.
Answer: True
25. Which of the following accounts is considered to be the most liquid?
Questions and Guide Answers
100% Verified Graded A+
1. The ability a company has to pay its debts in the short run is its
Answer: Liquidity
2. Which of the following is a measure of the liquid position of a corporation?-
Answer: Debt ratio
3. Which of the following ratios is used to measure a firm's leverage?
Answer: Debt Ratio
4. Which of the following ratios is used to measure the profit earned on each
dollar invested in a firm?
Answer: Return on Equity
,5. The emphasis in financial accounting is on which of the following external
user groups?
Answer: Investors and creditors
6. The primary internal group that uses accounting information is
Answer: Management
7. Internal reports are generally used by
Answer: Management
8. Which of the following is NOT an external user of financial information?
Answer: Man- agement
9. Which of the following is NOT true of the Financial Accounting Standards
Board (FASB)?
Answer: It is a government agency
10. Generally accepted accounting principles are
Answer: Developed by accounting rule makers
11. The initials GAAP stand for
Answer: Generally Accepted Accounting Principles
12. The current standard-setting board for accounting in the private sector is
the
Answer: Financial Accounting Standards Board (FASB)
,13. The organization that develops worldwide accounting standards is the
Answer: In- ternational Accounting Standards Board (IASB)
14. The initials CPA stand for
Answer: Certified Public Accountant
15. Which of the following is NOT a service typically provided by large public
accounting firms?
Answer: Making management decisions
16. Standards established by the International Accounting Standards Board are
referred to as
Answer: International Financial Reporting Standards
17. Which of the following is the government agency that stipulates the rules
and regulations that govern the collection of taxes in the United States?
Answer: Internal Revenue Service
18. Which of the following is NOT a reason for the integration of worldwide
accounting standards?
Answer: the theoretical necessity of a common set of accounting standards
19. The International Accounting Standards Board (IASB) is charged with devel-
oping worldwide accounting practices?
Answer: True
, 20. With the current state of information technology, investors outside a com-
pany are now allowed access to a company's internal database of financial in-
formation and do their own customized analysis of a firm's performance.
Answer: False
21. Increased federal oversight of the audit process resulted from the passage
of the following act of Congress –
Answer: Sarbanes-Oxley Act
22. A borrower benefits from providing financial information regarding income
and expenses in the form of a lower interest rate on the loan because of
reduced uncertainty for the lender with regard to repayment.
Answer: True
23. Which of the following is NOT one of the three primary financial state-
ments?
Answer: The Statement of Retained Earnings
24. One reason for a company's preparing and providing financial statements
is to reduce uncertainty for an investor regarding the firm's future financial
performance.
Answer: True
25. Which of the following accounts is considered to be the most liquid?
