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WGU C213
Accounting for Decision Makers
| Question | Answer |
|---|---|
| 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 |
| Order the steps in the decision cycle from first (1) to last (5). | Prepare financial statements Analyze financial statements Gather information Make decision Implement decision |
| Comprehensive income | The number used to reflect an overall measure of the change in a company’s wealth during the period |
| Net Income | A measure of a company's performance that is intended to summarize in one number the overall economic performance of a company in a given period is |
| Income from Continuing Operations | A measure of a company's performance that includes all items that are expected to continue into the future i |
| extraordinary items | Gains and losses that result from transactions that are both unusual in nature and infrequent in occurrence |
| Comprehensive income | reflects the overall change in a company’s wealth during a period and includes items that, in general, arise from changes in market conditions unrelated to the business operations of a company. |
| Revenue recognition | a cornerstone of accrual accounting together with matching principle. They both determine the accounting period, in which revenues and expenses are recognized. |
| Revenue recognition | A very good way to view ___________is that a company should report revenue in its income statement only after value has been delivered to its customers |
| Expanded Accounting Equation | Analysis of revenue and expense transactions requires the use of the |
| New Zealand | Thus far, the only national government to adopt the accrual basis for its official accounting system is ______ |
| Statement of Cash Flows Categories are | Operating activities Investing activities Financing activities |
| Operating Activities | Cash Receipts: Sale of goods , services, trading securities, interest revenue, and dividend revenue. Cash Payments: inventory purchases, Wages, Taxes, Interest expense, other expenses |
| Investing Activites | Cash Receipts: Sale of planet assets, business segment, nontrading securities, collection of princip. on loads. Cash Payments: Purchase of plant assets, nontrading securities, making loans to other entities |
| Cash equivalents | Short-term, highly liquid investments such as Treasury bills, commercial paper, and money market funds. |
| Which of the following is the typical sequencing of activities on the statement of cash flows? | Operating, investing, and financing |
| Financing Activities | Cash from: Issuances of stock, borrowing(mortgage, bonds, notes) Cash payments for: cash dividends, repayment of loads, repurchase of stock (treasury stock) |
| Significant noncash financing and investing transactions are | Reported in a narrative or in a separate schedule |
| indirect method | begins with net income as reported in the income statement and then details the adjustments needed to arrive at cash flow from operations |
| direct method | reporting the information contained in the last column of the adjustment worksheet |
| indirect method | 95% of large U.S. corporations use the________ when reporting cash from operating activities. |
| What is a cost that will change in the future based upon the decision made? | Differential cost |
| Opportunity Costs | The benefits lost or forfeited as a result of selecting one alternative course of action over another. |
| Out-of-pocket Costs | Costs that require an outlay of cash or other resources. |
| Pro Forma | A prediction of what the actual cash flow statement will look like in future years if the operating, investing, and financing plans are implemented. |
| Sunk Costs | Costs that are past costs and do not change as a result of a future decision. |
| Cost Behavior | The way a cost is affected by changes in activity levels. |
| Cost Drivers | Numerical measure used to reflect the amount of a specific cost that is associated with a particular activity. |
| Cost Pool | Total cost being generated by a specific overhead cost activity. |
| Differential Costs | Future costs that change as a result of a decision; also called incremental or relevant costs. |
| Direct Costs | Costs that are specifically traceable to a unit of business or segment being analyzed. |
| Period Costs | Costs not directly related to a product, service, or asset. They are charged as expenses to the income statement in the period in which they are incurred. |
| Product Costs | Costs associated with products or services offered. |
| Activity-based Costing (ABC) | A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs. |
| Unit-level Activities | Activities that take place each time a unit of product is produced. |
| Product-line Activities | Activities that take place in order to support a product line, regardless of the number of batches or individual units produced. |
| Facility Support Activities | Activities necessary to have a facility in order to participate in the development and production of products or services; activities are not related to any particular line of products or services. |
| Batch-level Activities | Activities that take place in order to support a batch or production run, regardless of the size of the batch. |
| C-V-P analysis, while useful for several purposes, is primarily useful in | Planning |
| C-V-P analysis is useful to managers in | Controlling decisions Planning Evaluating decisions |
| Mixed costs | Costs that contain both variable and fixed costs components. |
| cost-volume-profit (C-V-P) analysis | Techniques for determining how changes in revenues, costs, and level of activity affect the profitability of an organization. |
Created by:
mschelle816