WGU C708 Principles of Finance Latest 2022 with Verified Solutions

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WGU C708 Principles of Finance Latest 2022 with Verified Solutions Matching Principle ✔✔The revenues and the expected incurred to generate those revenues must be reported together; a fundamenta... l component of accrual-based accounting. Historical Cost Principle ✔✔Items that appear on the financial statement are listed at the cost when purchased. Current Assets ✔✔Cash or assets that will be converted into cash within the next year. Gross Fixed Assets ✔✔Property, Plant, and Equipment (PP&E). These are on the books at their historical cost. This does not include accumulated depreciation (do not consider accumulated depreciation when calculating cash flows). Liquidity ✔✔The more liquid the asset, the more quickly it can be turned into cash; measures how quickly an asset can be turned into cash without taking a large discount in value. Marketable Securities ✔✔Short-term, high-quality securities such as Treasury Bills and certificates of deposit (CDs). Contra-Asset Account ✔✔A balance/reserve account that decreases the balance of an Accounts Receivable (AR) account if there is doubt that all payments will be made to the firm to an amount that they expect to collect. Inventories ✔✔Includes raw material, work-in-progress, and finished goods. They are the least liquid. Last In, First Out (LIFO) ✔✔Assumes that the last inventory items purchased by the company are the first ones sold to customers. First In, First Out (FIFO) ✔✔Assumes that the first units purchased are the first sold. Historical Cost ✔✔The original purchase price. Book Value ✔✔Historical Cost - Accumulated Depreciation Fixed Liabilities ✔✔Obligations that require cash in the next year to pay. Notes Payable (NP) ✔✔The borrowing of interest-bearing money from a financial institution that the firm will owe back. Accruals ✔✔Obligations that have been uncured but not paid, such as employee wages or utilities. Long-Term Debt ✔✔A debt obligation with a maturity longer than one year, such as rent, office staff, and administration costs. Common Stock and Additional Paid-In C [Show More]

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