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WGU C213 ACCOUNTING FOR DECISION MAKERS
STUDY GUIDE FINAL EXAM
QUESTIONS AND VERIFIED ANSWERS / A+ GRADE
- What has had the most significant impact on accounting practices
ANS: Information technology
- Which term is defined as the residual interest in the net assets of a compa- ny
ANS: Owner's equity
- Which category on the statement of cash flows summarizes cash receipts and
payments to owners and creditors of the company
ANS: Cash flows from financing activities
- Where would an investor find a summary of a company's significant ac-
counting policies
ANS: In the Notes to Financial Statements
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- Which assurance does an external audit report provide for its readers
ANS: The company's financial statements fairly reflect its financial position.
- Relevant
ANS: Information having to do with the matter at hand
- Material
ANS: Information that is important enough to make a difference
- Reliable
ANS: Information that can be verified
- Conservatism
ANS: Information related to recognizing losses as they occur
- Steps in the decision cycle
ANS: 1. Prepare financial statements
- Analyze financial statements
- gather information
- Make decision
- implement decision
- Price-earnings ratio
ANS: Market value of shares / net income
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