WGU MBA Program C213 Accounting Exam Practice Questions

Provide an example of a current asset.

List some asset accounts.

An enterprises obligations to pay cash or other economic resources to others are called what?

How are current assets usually listed on a balance sheet?

In non-U.S. balance sheets, what is often seen?

The process of valuation involves computing numbers that are both what?

What is the process of determining the dollar value to assign to an item that is to be recognized in the financial statements called?

Why has historical cost long been used in accounting?

Reporting the details of a transaction in the notes to the financial statements is called what?

This is sometimes done in place of recognition when the effects of an event cannot be quantified with any degree of certainty. What is it?

When a company borrows money from a bank to be repaid over time, what is the effect on the accounting equation?

When a company purchases equipment on credit, what is the effect on the accounting equation?

When a company pays for a warehouse by paying cash, what is the effect on the accounting equation?

When a company buys a warehouse using a mortgage with a local bank, what is the effect on the accounting equation?

When an investor pays cash into a business to become a part owner, what is the effect on the accounting equation?

How is a companys asset mix determined?

A companys asset mix is strongly influenced by what?

What is financing mix a measure of?

Gross profit is the difference between what?

The concept that income is defined as the excess of net assets at the end of an accounting period over the net assets at the beginning of the accounting period, excluding the effect of transactions with owners, is called what?

What is the proper order on an income statement for the various measures of income?

A measure of a companys performance that includes all items that are expected to continue into the future is what?

Operating Income is equal to what?

The number used to reflect an overall measure of the change in a companys wealth during the period is what?

When a company determines to get out of a specific line of business, what happens?

For a gain or loss to be classified as extraordinary, it must be what?

When revenue and expense items are arranged to highlight important profit relationships, the resulting income statement format is called what?

With a single-step income statement, all revenues are grouped together, all expenses are grouped together, and net income is computed as the difference between the two. True or False?

Under the general rule of revenue recognition, when is revenue recognized?

A wholesale bakery would normally recognize revenue when what happens?

Costs that can be reasonably associated with specific revenues but NOT with specific products should be what?

Generally, when are recognition criteria met and revenues recognized?

Which principle best describes the rationale for matching administrative and selling expenses with revenues of the current period?

If a company anticipates a 40% increase in sales volume, then it is most likely that the company will need about a 40% increase in what?

What does SEC stand for?

What is the cause of financial statement problems?

External users of financial statements use financial statement analysis for what purpose?

When analyzing financial statements, what is prognosis?

Relationships between financial statement amounts are called what?

When analyzing financial statements, what is diagnosis?

Which of the following is a measure of the liquid position of a corporation?

What is one of the purposes of financial statement analysis?

Which transaction could increase a firms current ratio?

Which ratio is used to measure a firms leverage?

Which ratio represents the proportion of borrowed funds used to acquire the companys assets?

Which ratio is calculated using numbers from both the income statement and the balance sheet?

Which ratio is used to measure the profit earned on each dollar of sales in a firm?

Which ratio is a comparison of a financial statement number to a market value number?

In a common-size income statement, each item on the statement is expressed as a percentage of what?

What does a common-size financial statement enable a financial analyst to do?

Generally, which is the most useful in analyzing companies of different sizes?

When using common-size statements, what can be done?

When analyzing a companys debt ratio, if the ratio has a value that is equal to one, what does it mean?

The ratio that reflects the mix of sources of financing for a company is what?

What are the internal controls in purchasing?

What is the role of the PCAOB?