WGU Accounting for Decision Makers Dumps V9.02 Released: 69 Practice Questions for Exam Preparation

1. Which ratio provides a measure of how well a company turns sales into profits?

2. Which financial statement is used to determine a company’s income and expenses for a specific period?

3. What can be deduced when a company has an asset turnover of 0.95?

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, the following events occurred:

January 1

The corporation received $900,000 in cash in exchange for stock issued to stockholders.

January 3

The corporation borrowed $250,000 from a bank. The loan is a four-year loan with an interest rate of 12%, payable each year on January 1 beginning in Year 2.

January 5

The corporation purchased equipment to be used in the business for $200,000 cash.

January 8

The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers.

January 15

The corporation hired five employees. Each employee will be paid $1,000 at the end of each month.

January 30

The corporation paid $6,000 cash for a one-year insurance policy. The policy period will begin on February 1, Year 1.

What will be the impact of the January 1 event on the company’s balance sheet on that date, along with an increase to cash of $900,000?

5. Which act was implemented as a result of the corporate scandals at companies such as Enron and WorldCom?

6. What does it mean if a company has a debt ratio of 101.5%?

7. Where should a company report cash payments to acquire or construct long-term fixed assets on a statement of cash flows?

8. What purpose do the notes within financial statements serve to the Financial Accounting Standards Board?

9. The following list provides partial financial information for a company.

Current assets = $36,543

Total assets = $58,719

Current liabilities = $24,824

Total liabilities = $48,561

Stockholders' equity = $10,158

Sales = $46,997

Net income = $3,761

Market value of equity = $41,316

What is the current ratio for this company?

10. Which balance sheet category reflects what a company owns that can be turned into cash or used to generate cash?

11. Which body regulates a certified public accounting firm’s audit practices when the firm is auditing a large, publicly traded company?

12. Which events represent financial information recorded in the accounting system of a business?

13. A corporation has liabilities and owners’ equity of $100 million and $40 million respectively.

What is the amount of the asset balance in this case?

14. The following list provides partial financial information for a company.

Financial Category | 20X3 | 20X2

Net income | $3,540 | ?

Cash from operations | $4,417 | ?

Cash paid for capital expenditures | $5,613 | ?

Cash paid for acquisitions | $5,964 | ?

Cash paid for interest | $2,782 | ?

Cash paid for income taxes | $2,860 | ?

What is the cash flow to net income ratio for this company in 20X2?

15. Which two item subtotals are included in a multi-step income statement? Choose 2 answers.

16. Which user group of financial statements evaluates the ability to repay loans?

17. Which information does a balance sheet provide about a company?

18. What does the overall economic performance of a company for a given time period represent?

19. Which two items on an income statement result in decreased net income if they are increased? Choose 2 answers.

20. What is true regarding the use of International Financial Reporting Standards (IFRS)?

21. Which formula yields a cash times interest earned ratio of 11?

22. What can be determined when a firm performs an external audit of a company's financial statements?

23. Which organization establishes rules U.S. companies use to record and report accounting transactions?

24. Which change occurred if the cost of goods sold moved from 76.8% to 72.6%?

25. Which current asset on a balance sheet appears first in the traditional category order for U.S.-based companies?