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WGU C213 Accounting for Decision Makers OA
Final Exam Official Practice Exam Actual Exam
2026/2027 with Detailed Rationales | Complete
Exam-Style Questions | Pass Guaranteed – A+
Graded
TABLE OF CONTENTS
Section 1 | Financial Analysis | Q1 – Q10
Section 2 | Controls and Regulations | Q11 – Q20
Section 3 | Cost Systems | Q21 – Q30
Section 4 | Profit Planning | Q31 – Q40
Section 5 | Budgeting & Integrated Case Analysis | Q41 – Q50
Instructions: Choose the single best answer. Pass: 80% in 90 minutes.
══════════════════════════════════════
SECTION 1: FINANCIAL ANALYSIS Q1 – Q10
══════════════════════════════════════
Question 1 of 50
A company purchases a piece of machinery for $50,000, paying $10,000 in cash
and signing a promissory note for the remaining $40,000. Determine how this
transaction affects the company's accounting equation.
A. Assets increase by $40,000 and liabilities increase by $40,000. ✓ CORRECT
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B. Assets increase by $50,000 and liabilities increase by $50,000.
C. Assets increase by $40,000 and equity increases by $40,000.
D. Assets increase by $50,000 and equity decreases by $10,000.
Correct Answer: A
Rationale: The machinery (an asset) increases by $50,000, but cash (an asset)
decreases by $10,000, resulting in a net asset increase of $40,000, which is exactly
offset by a $40,000 increase in notes payable (a liability). The alternative
suggesting a $50,000 increase in assets fails to account for the cash outflow,
ignoring the dual nature of the transaction. Always net the asset changes when cash
is involved in an asset acquisition.
Question 2 of 50
Apex Corporation issues 10,000 shares of common stock with a par value of $1 per
share at a market price of $15 per share. Classify the cash inflow generated by this
transaction on the statement of cash flows.
A. Operating activity
B. Financing activity ✓ CORRECT
C. Investing activity
D. Non-cash investing and financing activity
Correct Answer: B
Rationale: Issuing common stock represents an external transaction involving the
owners of the corporation, categorizing it as a financing activity on the statement
of cash flows. The temptation to classify this as an investing activity arises from
the large cash inflow, but investing activities strictly pertain to the acquisition and
,3
disposal of long-term assets and investments. Remember that transactions with
owners and creditors always fall under financing.
Question 3 of 50
Lakeside Manufacturing has current assets of $400,000 and current liabilities of
$200,000 at the end of the fiscal year. If the company uses $50,000 in cash to pay
off a portion of its accounts payable, calculate the new current ratio.
A. 2.5 to 1
B. 1.75 to 1
C. 2.33 to 1 ✓ CORRECT
D. 1.5 to 1
Correct Answer: C
Rationale: Paying accounts payable reduces both current assets (cash) and current
liabilities (accounts payable) by $50,000, resulting in new current assets of
$350,000 and new current liabilities of $150,000, making the current ratio
$350,000 divided by $150,000, or 2.33 to 1. The incorrect answer of 1.75 fails to
recognize that paying a current liability with a current asset changes both sides of
the fraction. When a current ratio is greater than 1, reducing both numerator and
denominator by the same amount will always increase the ratio.
Question 4 of 50
An income statement reports net sales of $1,200,000 and cost of goods sold of
$720,000. Express the cost of goods sold as a percentage of net sales using vertical
analysis.
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A. 60% ✓ CORRECT
B. 40%
C. 167%
D. 120%
Correct Answer: A
Rationale: Vertical analysis expresses each item on a financial statement as a
percentage of a base amount, with net sales serving as the base for an income
statement, so $720,000 divided by $1,200,000 equals 60%. The 40% figure
represents the gross margin percentage rather than the cost of goods sold
percentage, a common misinterpretation of the base figure relationship. Always
divide the line item by the total base to find its common-size percentage.
Question 5 of 50
A company reports net income of $150,000 and depreciation expense of $20,000.
During the year, accounts receivable increased by $15,000 and accounts payable
decreased by $5,000. Compute the net cash provided by operating activities using
the indirect method.
A. $180,000
B. $150,000 ✓ CORRECT
C. $190,000
D. $110,000
Correct Answer: B
Rationale: Under the indirect method, the net cash provided by operating activities
is calculated by adjusting net income for non-cash items and working capital
WGU C213 Accounting for Decision Makers OA
Final Exam Official Practice Exam Actual Exam
2026/2027 with Detailed Rationales | Complete
Exam-Style Questions | Pass Guaranteed – A+
Graded
TABLE OF CONTENTS
Section 1 | Financial Analysis | Q1 – Q10
Section 2 | Controls and Regulations | Q11 – Q20
Section 3 | Cost Systems | Q21 – Q30
Section 4 | Profit Planning | Q31 – Q40
Section 5 | Budgeting & Integrated Case Analysis | Q41 – Q50
Instructions: Choose the single best answer. Pass: 80% in 90 minutes.
══════════════════════════════════════
SECTION 1: FINANCIAL ANALYSIS Q1 – Q10
══════════════════════════════════════
Question 1 of 50
A company purchases a piece of machinery for $50,000, paying $10,000 in cash
and signing a promissory note for the remaining $40,000. Determine how this
transaction affects the company's accounting equation.
A. Assets increase by $40,000 and liabilities increase by $40,000. ✓ CORRECT
,2
B. Assets increase by $50,000 and liabilities increase by $50,000.
C. Assets increase by $40,000 and equity increases by $40,000.
D. Assets increase by $50,000 and equity decreases by $10,000.
Correct Answer: A
Rationale: The machinery (an asset) increases by $50,000, but cash (an asset)
decreases by $10,000, resulting in a net asset increase of $40,000, which is exactly
offset by a $40,000 increase in notes payable (a liability). The alternative
suggesting a $50,000 increase in assets fails to account for the cash outflow,
ignoring the dual nature of the transaction. Always net the asset changes when cash
is involved in an asset acquisition.
Question 2 of 50
Apex Corporation issues 10,000 shares of common stock with a par value of $1 per
share at a market price of $15 per share. Classify the cash inflow generated by this
transaction on the statement of cash flows.
A. Operating activity
B. Financing activity ✓ CORRECT
C. Investing activity
D. Non-cash investing and financing activity
Correct Answer: B
Rationale: Issuing common stock represents an external transaction involving the
owners of the corporation, categorizing it as a financing activity on the statement
of cash flows. The temptation to classify this as an investing activity arises from
the large cash inflow, but investing activities strictly pertain to the acquisition and
,3
disposal of long-term assets and investments. Remember that transactions with
owners and creditors always fall under financing.
Question 3 of 50
Lakeside Manufacturing has current assets of $400,000 and current liabilities of
$200,000 at the end of the fiscal year. If the company uses $50,000 in cash to pay
off a portion of its accounts payable, calculate the new current ratio.
A. 2.5 to 1
B. 1.75 to 1
C. 2.33 to 1 ✓ CORRECT
D. 1.5 to 1
Correct Answer: C
Rationale: Paying accounts payable reduces both current assets (cash) and current
liabilities (accounts payable) by $50,000, resulting in new current assets of
$350,000 and new current liabilities of $150,000, making the current ratio
$350,000 divided by $150,000, or 2.33 to 1. The incorrect answer of 1.75 fails to
recognize that paying a current liability with a current asset changes both sides of
the fraction. When a current ratio is greater than 1, reducing both numerator and
denominator by the same amount will always increase the ratio.
Question 4 of 50
An income statement reports net sales of $1,200,000 and cost of goods sold of
$720,000. Express the cost of goods sold as a percentage of net sales using vertical
analysis.
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A. 60% ✓ CORRECT
B. 40%
C. 167%
D. 120%
Correct Answer: A
Rationale: Vertical analysis expresses each item on a financial statement as a
percentage of a base amount, with net sales serving as the base for an income
statement, so $720,000 divided by $1,200,000 equals 60%. The 40% figure
represents the gross margin percentage rather than the cost of goods sold
percentage, a common misinterpretation of the base figure relationship. Always
divide the line item by the total base to find its common-size percentage.
Question 5 of 50
A company reports net income of $150,000 and depreciation expense of $20,000.
During the year, accounts receivable increased by $15,000 and accounts payable
decreased by $5,000. Compute the net cash provided by operating activities using
the indirect method.
A. $180,000
B. $150,000 ✓ CORRECT
C. $190,000
D. $110,000
Correct Answer: B
Rationale: Under the indirect method, the net cash provided by operating activities
is calculated by adjusting net income for non-cash items and working capital
