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and Answers 202 3-2024 Graded A+
WGU C213 Pre Assessment Questions
and Answers 2023 -2024 Graded A+
What does accounting focus on? - ✅The impact a business's activities have on its overall financial performance Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? - ✅Statement of cash flows Which users would have a primary concern with an organization's ability to provide healthcare benefits? - ✅Employees Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company? - ✅The Public Company Accounting Oversight Board (PCAOB) What has had the most significant impact on accounting practices? - ✅Information technology What two items of information are revealed on the balance sheet? Choose 2 answers - ✅Ownership. Debt Which term is defined as the residual interest in the net assets of a company? - ✅Owners' equity A corporation has total liabilities of $300 million, total owners' equity of $100 million, and current assets of $50 million. What is the value of the firm's long-term assets? - ✅$350 million Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting? - ✅In 2014, a company provides services to a customer for which cash will be collected the next year (2015). Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company? - ✅Cash flows from financing activities
and Answers 202 3-2024 Graded A+
Where would an investor find a summary of a company's significant accounting policies? - ✅In the notes to financial statements Which assurance does an external audit report provide for its readers? - ✅The company's financial statements fairly reflect its financial position Reliable - ✅Information that can be verified Relevant - ✅Information having to do with the matter at hand Material - ✅Information that is important enough to make a difference Conservatism - ✅Information related to recognizing losses as they occur What are steps in the decision cycle? - ✅1 Prepare financial statements. 2 Analyze financial statements. 3 Gather information. 4 Make decision. 5 Implement decision. Partial financial information for a company is as follows: Current assets $36, Total assets $58, Current liabilities $24, Total liabilities $48, Stockholders' equity $10, Sales $46, Net Income $ 3, Market value of shares $41, What is the price-earnings (PE) ratio for this company? - ✅11. What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the same? - ✅Continual decrease in sales Which two cash flow adequacy ratios represent a cash cow? - ✅$6,991/$5,486. $5,220/$1,875. Which formula yields a cash times interest earned ratio of 11? - ✅Cash before interest and taxes of $11,000 / cash paid for interest of $1,
and Answers 202 3-2024 Graded A+
January 15 The corporation hired five employees. Each employee will be paid $1,000 at the end of each month. January 31 The corporation paid $6,000 cash for a one-year insurance policy. The policy p - ✅Prepaid insurance will increase $6,000, and cash will decrease $6,000. Which two values affect the measurement of net income? Choose 2 answers - ✅Ordinary gains and losses. Operating expenses Which two items' subtotals are included in a multi-step income statement? Choose 2 answers - ✅Gross profit. Income from operations A furniture company using accrual accounting purchased 20 sofas in November
- In December 2011, 8 of the 20 sofas were sold to customers. The customers all signed contracts agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012. At the time of sale, the company was reasonably sure the customers would pay the amount owed. The furniture company pays its salespeople a commission on each sofa sold, with commissions for December 2011 sales paid in January 2012. The furniture company paid $3,000 for advertising that ran in the local newspaper in November 2011. In which month should advertising costs be expensed? - ✅November 2011 On May 1, 2011, a company using accrual accounting purchased equipment costing $500,000. It expects the equipment to have a useful life of five years. At the time of purchase, the company also purchased a one-year insurance policy on this equipment, which cost $6,000. How much insurance expense should the company have recognized for the year ending in 2011? - ✅$4, In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, it focused on obtaining the financing needed to start its operations. In February of year 1, the company sold inventory costing $25,000 for $75,000 cash.
and Answers 202 3-2024 Graded A+
In February of year 1, the company provided technology-related services worth $10,000. Customers paid a total of $4,000 in cash for these services and promised to pay the remainder the following month. What will be the total impact of these services provided on the company's balance sheet other than an increase in cash of $4,000? Choose 2 answers - ✅Accounts receivable will increase $6,000. Retained earnings will increase $10,000. What was the 2012 net profit amount if the 2013 pro-forma net profit of $187, was based on a 22% increase? - ✅$153, What is a common category in a statement of cash flows? - ✅Cash from investing activities Which cash flow category would include "cash received from investors"? - ✅Cash from financing activities Which item is an investing activity? - ✅Cash payments for purchase of plant assets What impact does the sale of equipment have on the statement of cash flows? - ✅Increase in cash from investing activities What is known about the direct and indirect methods of preparing statements of cash flow? - ✅The indirect method is more popular among large U.S. companies A company's statement of cash flows includes the following cash transactions: Sales 1,250, Inventory Purchase -750, Property and Equipment Purchase -270, Interest Payment on Long-Term Debt -25, Payment of Wages -315, Payment of Rent -40, Borrowing Long-Term Debt 200, Payment of Cash Dividends -15, Repurchase of Treasury Stock -40, Total Cash Flows -5, Assuming the company uses US GAAP standards, what is the total cash flow from financing activities? - ✅$145,
and Answers 202 3-2024 Graded A+
✅The insight that management needs so the business can perform more effectively. The detailed data that managers need to make decisions that will give the business a competitive edge. How does management accounting differ from financial accounting? - ✅Management accounting is used primarily for internal planning, control, and evaluation. Which account is seen on the balance sheet of a manufacturing company but not on the balance sheet of a service-oriented company? - ✅Inventory What is a cost that will change in the future based upon the decision made? - ✅Differential cost Which two examples are period costs? Choose 2 answers - ✅Administrative expenses. Selling expenses. A company manufactures custom-built wooden bookshelves. Which two costs would the company classify as period costs? Choose 2 answers - ✅Salary cost of the receptionist. Advertising cost. What role do ethical standards have in management accounting? - ✅To guide the resolution to possible ethical dilemmas that the managerial accountant may encounter During its first month of operations, a manufacturer incurs the following costs in dollars related to activities within its factory: Direct materials costs $5, Indirect materials $2, Direct labor $15, Indirect labor $3, Factory rent $10, Depreciation on factory equipment $8, What are the manufacturer's total product costs for the month? - ✅$43, During its first month of operations, a manufacturer incurs the following costs (in dollars) related to activities within its factory: Direct materials $15,
and Answers 202 3-2024 Graded A+
Direct labor $30, Manufacturing overhead $40, What amount should be reported as cost of goods sold on the income statement if 5,000 units are produced and 4,000 are sold? - ✅$68, Which two costs are included when calculating inventory costs? Choose 2 answers - ✅Direct labor costs. Overhead costs. In which scenario would activity-based costing be more appropriate than traditional costing? - ✅A company produces five different products. The products are highly differentiated and have significantly different demands for their use of overhead costs. Which category of ABC activities are machine setup and material movement costs associated with? - ✅Batch-level activities The director of a marathon race wants to assign the cost of having police officers along the race route to manage crowd control. Which consideration is an appropriate cost driver? - ✅The number of race participants and spectators. The company uses the following information to determine activity rates for each pool: Cost Pool Costs Total Activity Pool 1 $300, 20,000 hours Pool 2 $20, 500 pounds Pool 3 $10, 100 moves Total $330, Data concerning the three products appear below:
and Answers 202 3-2024 Graded A+
Data concerning the three shoe products appear below: Cost Driver Traditional Minimalist Spikes Number of pairs of shoes 10, 7, 2, Number of batches 150 250 100 Number of parts 20 30 50 What is the total amount of overhead applied to spikes shoes? - ✅$35, Company A calculated the following information under traditional and activity-based costing for the production and sale of 1,000 units of Product B: Traditional ABC Sales $100,000 $100, Cost of goods sold $70,000 $110, Gross margin $30,000 ($10,000) Which decision should be made about the selling price of Product B? - ✅The price of Product B should be increased. A company reported the following information for the production and sale of 500, gallons of oil: (Image) Overhead was applied based upon the following predetermined overhead rates: $0.75 per gallon $500 per batch $1,000 per ingredient
and Answers 202 3-2024 Graded A+
What would be the gross profit if the company increased their selling price per gallon by $0.10? - ✅$20, Which two concepts are studied in cost-volume-profit analysis? Choose 2 answers - ✅Levels of activity. Profits. What are two impacts on costs as sales volume increases? Choose 2 answers - ✅Total fixed costs will stay the same. Fixed costs per unit will decrease. A company manufactures and sells widgets. The following information is available:
- Each widget sells for $100.
- The variable cost per widget is $50.
- Total fixed costs per month are $300,000. How many widgets does the company need to sell each month to break even? - ✅6, (Image) What do total revenues equal at the break-even point? - ✅$4, (Image) Which statement is true with respect to the point on this graph when sales are at 150 units per month? - ✅Total costs equal $3,500. A company is experiencing an increase in their bad debt expense. Which change in credit policy would cause this increase? - ✅Credit limits were increased for all customers. A company has projected the following sales for the spring quarter of 2014: April $200, May $250, June $275, 65% of all sales are paid for with cash. The remainder is on credit. The pattern for credit receivables collections are: Month of Sale 60% Month After Sale 30% Second Month After Sale 10%
and Answers 202 3-2024 Graded A+
500 pounds Pool 3 $10, 100 moves Total $330, Data concerning the three products appear below: Cost Driver Products A Products B Products C Number of hours 10, 7, 2, Number of pounds 150 250 100 Number of moves 20 30 50 What is the total amount of overhead applied to product A? - ✅$158, Given the following information: Pairs of shoes expected to be produced 1,950, Pairs of shoes produced 2,500, Overhead rate $0. What is the amount of applied overhead? - ✅$1,875, How are assets listed on the balance sheet? - ✅In order of decreasing liquidity
and Answers 202 3-2024 Graded A+
Describe the difference between a manufacturing environment and a service environment - ✅The only difference is a manufacturing company has direct inventory/materials. What is the role of the U.S. Securities and Exchange Commission (SEC) in financial reporting? - ✅• it regulates u.s. stock exchanges
- creates a fair information environment to buy and sell stock
- companies planning to issue new debt or stock to the public must submit a registration statement to the public for approval •SEC can suspend trading of a companies stock Compare and contrast traditional costing to activity-based accounting. - ✅•ABC is a more accurate product costing system •ABC requires more time and expense to administer •companies with diverse products involving substantially different production processes, on ABC system yields better cost data and better management decisions Describe how basic cost behavior patterns change as sales volume change. - ✅• fixed costs are fixed in total but as sales volume increases, the per unit fc decreases
- variable costs are fixed per unit, but as sales volume increases, total vc increases
- as sales increase:total VC increases per unit VC remains the same total fixed costs remains the same per unit fixed costs decreases What is operating activities? - ✅all categories on the income statement and all current assets and liabilities. sales, COGS, operating expenses. What is investing activities? - ✅balance sheet accounts; long term assets. property, plant, equipment, investments, cash paid for equipment or investments What is financing activities? - ✅balance sheet accounts. long term liabilities and equity. mortgage payable; common stock and additional paid in capital, retained earnings Explain Accrual Accounting. - ✅Income and expenses are recorded as they occur, regardless of whether or not cash has actually exchanged hands. When is revenue recognized? - ✅When the promised work is done and cash collection must be reasonably assured. When are expenses recognized? -
