WGU C213 PA & OA Study Guide
2022/2023
1.Which of the following is the most correct definition of accounting?: A
system for providing quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions
2.What is NOT typically true of accounting information?: The
information relates to future time periods.
3.Which is NOT a key component of the definition of accounting?:
Qualitative
4.What is true about the double-entry system of bookkeeping?: It was
devel- oped in the 1300s1400s in Italy.
5.Businesses use accounting systems to: Analyze transactions; Handle
rou- tine bookkeeping tasks; Evaluate performance and health of the business.
6.What is not a function of accounting?: Executing sales
transactions for organizations
7.What is NOT one of the three primary financial statements?: Statement
of retained earnings
8.Generally accepted accounting principles are: Developed by accounting
rule makers
9.The initials GAAP stand for: Generally Accepted Accounting Principles
10.The current standard-setting board for accounting in the private
sector is the: Financial Accounting Standards Board (FASB)
11.Which of the following organizations has specific legal authority to
es- tablish accounting standards for publicly held companies?:
Securities and Exchange Commission (SEC) 12.Which is NOT a service typically provided by large public
accounting firms?: Making management decisions
13.The organization that develops worldwide accounting standards is the: 1 / 3
- International Accounting Standards Board (IASB)
14.The initials CPA stand for: Certified Public Accountant
15.Which of the following financial statements reports a company's
re- sources, obligations, and owner's equity?: Balance sheet
16.Which of the following financial statements reports the excess of
a company's revenues over its expenses?: Income statement
17.Which of the following financial statements reports the amount of cash collected and paid out by a company?: Statement of cash flows 2 / 3
18.The emphasis in financial accounting is on which of the following
exter- nal user groups?: Investors and creditors
19.The primary internal group that uses accounting information is:
Manage- ment
20.Internal reports are generally used by: Management
21.Which of the following is NOT an external user of financial information?-
: Management
22.Which of the following is NOT true of the Financial Accounting
Standards Board (FASB)?: It is a government agency
23.Which of the following is NOT a service typically provided by large
public accounting firms?: Making management decisions
24.Standards established by the International Accounting Standards
Board are referred to as: International Financial Accounting Standards
25.Which of the following is NOT a reason for the integration of worldwide
accounting standards?: the theoretical necessity of a common set of
accounting standards 26.The International Accounting Standards Board (IASB) is charged
with developing worldwide accounting practices: True
27.With the current state of information technology, investors outside a com- pany are now allowed access to a company's internal database of financial information and do their own customized analysis of a firm's performance.-
: False
28.Increased federal oversight of the audit process resulted from the
pas- sage of the following act of Congress: Sarbanes-Oxley Act
29.Steps in the decision cycle from first (1) to last (5): Prepare
financial statements Analyze financial statements Gather information Make decision Implement decision 30.What is the price-earnings (PE) ratio for this
- / 3