COURSE CODE: WGU C213
EXAM DATE TIME ALLOWED
COURSE TITLE: Accounting for Decision Makers
— / — / —— 120 Minutes
INSTRUCTOR: —
WGU C213 — Accounting for
Decision Makers
Comprehensive Final Examination
ALL QUESTIONS ARE COMPULSORY
A MULTIPLE CHOICE QUESTIONS ◆ 40 Marks
Choose the single best answer for each question. Write the correct letter (A, B, C, or D) in the space provided.
1. Which of the following best describes the primary purpose of financial accounting
information?
A. To support internal management decisions about pricing and production
B. To provide useful information for external users in making decisions about the future
C. To calculate the exact amount of taxes a company must pay to the IRS
D. To record every financial transaction without summarization
◆ B — To provide useful information for external users in making decisions about the future
RATIONALE: Financial accounting is primarily prepared for and used by external users—investors, creditors,
regulators, and the public—who need summarized, standardized information to make informed decisions about
the company. Option A describes managerial accounting, which serves internal users. Option C is incorrect because
financial statements are not used to determine tax liability; the IRS has separate rules. Option D describes
bookkeeping, which is the recording process that feeds into accounting but is not its primary purpose. Financial
accounting condenses information into summary reports.
Page 1 of 11
, 2. What are the three primary financial statements?
A. Balance sheet, income statement, and statement of retained earnings
B. Balance sheet, income statement, and statement of cash flows
C. Income statement, tax return, and balance sheet
D. Statement of cash flows, tax return, and income statement
◆ B — Balance sheet, income statement, and statement of cash flows
RATIONALE: The three primary financial statements are the balance sheet (reports financial position at a point in
time), the income statement (reports net income earned over a period), and the statement of cash flows (reports
cash collected and paid out in operating, investing, and financing activities). The statement of retained earnings (A)
is a supporting schedule, not one of the three primary statements. Tax returns (C, D) are not financial statements
but compliance documents filed with the IRS under different rules.
3. Which private body establishes accounting rules in the United States?
A. Securities and Exchange Commission (SEC)
B. Internal Revenue Service (IRS)
C. Financial Accounting Standards Board (FASB)
D. Public Company Accounting Oversight Board (PCAOB)
◆ C — Financial Accounting Standards Board (FASB)
RATIONALE: The FASB is the private-sector body that establishes U.S. Generally Accepted Accounting Principles
(GAAP). It is supported by the business community, financial analysts, and practicing accountants. The SEC (A) is a
government agency that regulates stock exchanges and requires public companies to follow FASB standards but
does not establish accounting rules itself. The IRS (B) establishes tax rules, not financial accounting rules. The
PCAOB (D) inspects audit firms and enforces audit standards, not accounting standards.
Page 2 of 11
EXAM DATE TIME ALLOWED
COURSE TITLE: Accounting for Decision Makers
— / — / —— 120 Minutes
INSTRUCTOR: —
WGU C213 — Accounting for
Decision Makers
Comprehensive Final Examination
ALL QUESTIONS ARE COMPULSORY
A MULTIPLE CHOICE QUESTIONS ◆ 40 Marks
Choose the single best answer for each question. Write the correct letter (A, B, C, or D) in the space provided.
1. Which of the following best describes the primary purpose of financial accounting
information?
A. To support internal management decisions about pricing and production
B. To provide useful information for external users in making decisions about the future
C. To calculate the exact amount of taxes a company must pay to the IRS
D. To record every financial transaction without summarization
◆ B — To provide useful information for external users in making decisions about the future
RATIONALE: Financial accounting is primarily prepared for and used by external users—investors, creditors,
regulators, and the public—who need summarized, standardized information to make informed decisions about
the company. Option A describes managerial accounting, which serves internal users. Option C is incorrect because
financial statements are not used to determine tax liability; the IRS has separate rules. Option D describes
bookkeeping, which is the recording process that feeds into accounting but is not its primary purpose. Financial
accounting condenses information into summary reports.
Page 1 of 11
, 2. What are the three primary financial statements?
A. Balance sheet, income statement, and statement of retained earnings
B. Balance sheet, income statement, and statement of cash flows
C. Income statement, tax return, and balance sheet
D. Statement of cash flows, tax return, and income statement
◆ B — Balance sheet, income statement, and statement of cash flows
RATIONALE: The three primary financial statements are the balance sheet (reports financial position at a point in
time), the income statement (reports net income earned over a period), and the statement of cash flows (reports
cash collected and paid out in operating, investing, and financing activities). The statement of retained earnings (A)
is a supporting schedule, not one of the three primary statements. Tax returns (C, D) are not financial statements
but compliance documents filed with the IRS under different rules.
3. Which private body establishes accounting rules in the United States?
A. Securities and Exchange Commission (SEC)
B. Internal Revenue Service (IRS)
C. Financial Accounting Standards Board (FASB)
D. Public Company Accounting Oversight Board (PCAOB)
◆ C — Financial Accounting Standards Board (FASB)
RATIONALE: The FASB is the private-sector body that establishes U.S. Generally Accepted Accounting Principles
(GAAP). It is supported by the business community, financial analysts, and practicing accountants. The SEC (A) is a
government agency that regulates stock exchanges and requires public companies to follow FASB standards but
does not establish accounting rules itself. The IRS (B) establishes tax rules, not financial accounting rules. The
PCAOB (D) inspects audit firms and enforces audit standards, not accounting standards.
Page 2 of 11
