WGU C213 PA & OA STUDY GUIDE | 2026
UPDATE | QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTION ALREADY
GRADED A+
In 2014, a company provides services to a customer for which cash will be
collected the next year (2015). - ANSWERS-Which situation should result in
revenue recognition on the income statement for the year ending 12/31/14 if
the firm is using accrual accounting?
Cash from financing activities - ANSWERS-Which category on the statement
of cash flows summarizes cash receipts and payments to owners and
creditors of the company?
In the notes to financial statements - ANSWERS-Where would an investor
find a summary of a company's significant accounting policies?
The company's financial statements fairly reflect its financial position -
ANSWERS-Which assurance does an external audit report provide for its
readers?
Reliable - ANSWERS-Information that can be verified
Relevant - ANSWERS-Information having to do with the matter at hand
Material - ANSWERS-Information that is important enough to make a
difference
,Conservatism - ANSWERS-Information related to recognizing losses as they
occur
Continual decrease in sales - ANSWERS-What is consistent with a continual
decline in gross profit if the firm's cost of goods sold remains the same?
Notes payable expected to be paid in 18 months - ANSWERS-Which form of
debt should be reported in the long-term liability category?
The impact a business's activities have on its overall financial performance -
ANSWERS-What does accounting focus on?
Statement of cash flows - ANSWERS-Which report summarizes cash
collections and cash expenditures from operating, investing, and financing
activities over a period of time?
Employees - ANSWERS-Which users would have a primary concern with an
organization's ability to provide healthcare benefits?
An increase in its compatibility to other companies - ANSWERS-Which benefit
does a corporation gain by following Generally Accepted Accounting
Principles (GAPP)?
The Public Company Accounting Oversight Board (PACOB) - ANSWERS-Which
body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company?
Information technology - ANSWERS-What has had the most significant
impact on Accounting practices?
Ownership and Debt - ANSWERS-What two items of information are revealed
on the balance sheet?
, Owners equity - ANSWERS-Which term is defined as the residual in the net
assets of a company?
Operating expenses &
Ordinary gains and losses - ANSWERS-Which values affect the measurement
of net income?
Gross profit &
Income from operations - ANSWERS-Which items' subtotals are included in a
multi-step income statement?
Cash from investing activities - ANSWERS-What is a common category in a
statement of cash flows?
Cash from financing activities - ANSWERS-Which cash flow category would
include "cash received from investors"?
Cash payments for purchase of plant assets - ANSWERS-Which item is an
investing activity?
Increase in cash from investing activities - ANSWERS-What impact does the
sale of equipment have on the statement of cash flows?
The indirect method is more popular among large U.S. companies -
ANSWERS-What is known about the direct and indirect methods of preparing
statements of cash flow?
UPDATE | QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTION ALREADY
GRADED A+
In 2014, a company provides services to a customer for which cash will be
collected the next year (2015). - ANSWERS-Which situation should result in
revenue recognition on the income statement for the year ending 12/31/14 if
the firm is using accrual accounting?
Cash from financing activities - ANSWERS-Which category on the statement
of cash flows summarizes cash receipts and payments to owners and
creditors of the company?
In the notes to financial statements - ANSWERS-Where would an investor
find a summary of a company's significant accounting policies?
The company's financial statements fairly reflect its financial position -
ANSWERS-Which assurance does an external audit report provide for its
readers?
Reliable - ANSWERS-Information that can be verified
Relevant - ANSWERS-Information having to do with the matter at hand
Material - ANSWERS-Information that is important enough to make a
difference
,Conservatism - ANSWERS-Information related to recognizing losses as they
occur
Continual decrease in sales - ANSWERS-What is consistent with a continual
decline in gross profit if the firm's cost of goods sold remains the same?
Notes payable expected to be paid in 18 months - ANSWERS-Which form of
debt should be reported in the long-term liability category?
The impact a business's activities have on its overall financial performance -
ANSWERS-What does accounting focus on?
Statement of cash flows - ANSWERS-Which report summarizes cash
collections and cash expenditures from operating, investing, and financing
activities over a period of time?
Employees - ANSWERS-Which users would have a primary concern with an
organization's ability to provide healthcare benefits?
An increase in its compatibility to other companies - ANSWERS-Which benefit
does a corporation gain by following Generally Accepted Accounting
Principles (GAPP)?
The Public Company Accounting Oversight Board (PACOB) - ANSWERS-Which
body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company?
Information technology - ANSWERS-What has had the most significant
impact on Accounting practices?
Ownership and Debt - ANSWERS-What two items of information are revealed
on the balance sheet?
, Owners equity - ANSWERS-Which term is defined as the residual in the net
assets of a company?
Operating expenses &
Ordinary gains and losses - ANSWERS-Which values affect the measurement
of net income?
Gross profit &
Income from operations - ANSWERS-Which items' subtotals are included in a
multi-step income statement?
Cash from investing activities - ANSWERS-What is a common category in a
statement of cash flows?
Cash from financing activities - ANSWERS-Which cash flow category would
include "cash received from investors"?
Cash payments for purchase of plant assets - ANSWERS-Which item is an
investing activity?
Increase in cash from investing activities - ANSWERS-What impact does the
sale of equipment have on the statement of cash flows?
The indirect method is more popular among large U.S. companies -
ANSWERS-What is known about the direct and indirect methods of preparing
statements of cash flow?
