WGU C213 Accounting for Decision Makers –
Final Exam Practice Material (Qs & As) |
Latest Update 2026/2027 | Complete Exam
Preparation Set
Question 1
Which of the following best describes the primary purpose of financial accounting?
A) To maximize shareholder wealth
B) To provide information to external decision makers about a company's financial
performance and position
C) To calculate taxes owed to the government
D) To manage the company's day-to-day cash flow
Correct Answer: B
Rationale: Financial accounting focuses on providing financial information to external
users such as investors, creditors, and regulators to help them make informed decisions .
Unlike managerial accounting, which serves internal users, financial accounting
emphasizes accurate reporting for external stakeholders.
Question 2
The recording of the day-to-day financial activities of a company and the organization
of that information into summary reports used to evaluate the company's financial
status is called:
A) Bookkeeping
B) Accounting
C) Auditing
D) Financial analysis
Correct Answer: B
,Rationale: Accounting encompasses the entire process of recording, organizing, and
summarizing financial information . Bookkeeping is specifically the preservation of a
systematic, quantitative record of an activity and is considered a subset of accounting .
Question 3
Which of the following is NOT one of the three primary financial statements?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Statement of Management Responsibility
Correct Answer: D
Rationale: The three primary financial statements are the balance sheet, income
statement, and statement of cash flows . The statement of management responsibility is
not a financial statement; it is a disclosure regarding management's accountability for
the financial statements.
Question 4
Which financial statement reports a company's financial position at a specific point in
time?
A) Income Statement
B) Statement of Cash Flows
C) Balance Sheet
D) Statement of Retained Earnings
Correct Answer: C
Rationale: The balance sheet reports assets, liabilities, and owners' equity at a specific
point in time, providing a snapshot of the company's financial position .
Question 5
The income statement measures which of the following?
,A) Financial position at a point in time
B) Financial performance over a period of time
C) Cash flows from operating activities
D) Changes in owners' equity
Correct Answer: B
Rationale: The income statement reports revenues, expenses, and net income over a
period of time, measuring financial performance . It is a flow statement rather than a
snapshot.
Question 6
The statement of cash flows reports cash activities in which three categories?
A) Operating, Investing, and Financing
B) Operating, Investing, and Marketing
C) Financing, Investing, and Budgeting
D) Operating, Financing, and Administrative
Correct Answer: A
Rationale: The statement of cash flows reports cash collected and paid out in operating,
investing, and financing activities .
Question 7
The Balance Sheet equation is:
A) Assets = Liabilities + Owners' Equity
B) Assets = Liabilities - Owners' Equity
C) Assets + Liabilities = Owners' Equity
D) Assets + Owners' Equity = Liabilities
Correct Answer: A
Rationale: The accounting equation is Assets = Liabilities + Owners' Equity . This
equation must always balance after every transaction.
, Question 8
Which of the following is a probable future economic benefit obtained or controlled by
a company as a result of past transactions?
A) Liability
B) Asset
C) Expense
D) Revenue
Correct Answer: B
Rationale: An asset is defined as a probable future economic benefit obtained or
controlled by a company as a result of past transactions or events .
Question 9
Liabilities are divided into which two categories on the balance sheet?
A) Current and Long-term
B) Operating and Non-operating
C) Short-term and Medium-term
D) Fixed and Variable
Correct Answer: A
Rationale: Liabilities are divided into current and long-term categories on the balance
sheet . Both assets and liabilities are separated based on whether they are expected to
be consumed/paid within one year .
Question 10
In what order are assets typically listed on the balance sheet?
A) Alphabetical order
B) By order of liquidity
C) By dollar amount
D) By depreciation rate
Correct Answer: B
Final Exam Practice Material (Qs & As) |
Latest Update 2026/2027 | Complete Exam
Preparation Set
Question 1
Which of the following best describes the primary purpose of financial accounting?
A) To maximize shareholder wealth
B) To provide information to external decision makers about a company's financial
performance and position
C) To calculate taxes owed to the government
D) To manage the company's day-to-day cash flow
Correct Answer: B
Rationale: Financial accounting focuses on providing financial information to external
users such as investors, creditors, and regulators to help them make informed decisions .
Unlike managerial accounting, which serves internal users, financial accounting
emphasizes accurate reporting for external stakeholders.
Question 2
The recording of the day-to-day financial activities of a company and the organization
of that information into summary reports used to evaluate the company's financial
status is called:
A) Bookkeeping
B) Accounting
C) Auditing
D) Financial analysis
Correct Answer: B
,Rationale: Accounting encompasses the entire process of recording, organizing, and
summarizing financial information . Bookkeeping is specifically the preservation of a
systematic, quantitative record of an activity and is considered a subset of accounting .
Question 3
Which of the following is NOT one of the three primary financial statements?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Statement of Management Responsibility
Correct Answer: D
Rationale: The three primary financial statements are the balance sheet, income
statement, and statement of cash flows . The statement of management responsibility is
not a financial statement; it is a disclosure regarding management's accountability for
the financial statements.
Question 4
Which financial statement reports a company's financial position at a specific point in
time?
A) Income Statement
B) Statement of Cash Flows
C) Balance Sheet
D) Statement of Retained Earnings
Correct Answer: C
Rationale: The balance sheet reports assets, liabilities, and owners' equity at a specific
point in time, providing a snapshot of the company's financial position .
Question 5
The income statement measures which of the following?
,A) Financial position at a point in time
B) Financial performance over a period of time
C) Cash flows from operating activities
D) Changes in owners' equity
Correct Answer: B
Rationale: The income statement reports revenues, expenses, and net income over a
period of time, measuring financial performance . It is a flow statement rather than a
snapshot.
Question 6
The statement of cash flows reports cash activities in which three categories?
A) Operating, Investing, and Financing
B) Operating, Investing, and Marketing
C) Financing, Investing, and Budgeting
D) Operating, Financing, and Administrative
Correct Answer: A
Rationale: The statement of cash flows reports cash collected and paid out in operating,
investing, and financing activities .
Question 7
The Balance Sheet equation is:
A) Assets = Liabilities + Owners' Equity
B) Assets = Liabilities - Owners' Equity
C) Assets + Liabilities = Owners' Equity
D) Assets + Owners' Equity = Liabilities
Correct Answer: A
Rationale: The accounting equation is Assets = Liabilities + Owners' Equity . This
equation must always balance after every transaction.
, Question 8
Which of the following is a probable future economic benefit obtained or controlled by
a company as a result of past transactions?
A) Liability
B) Asset
C) Expense
D) Revenue
Correct Answer: B
Rationale: An asset is defined as a probable future economic benefit obtained or
controlled by a company as a result of past transactions or events .
Question 9
Liabilities are divided into which two categories on the balance sheet?
A) Current and Long-term
B) Operating and Non-operating
C) Short-term and Medium-term
D) Fixed and Variable
Correct Answer: A
Rationale: Liabilities are divided into current and long-term categories on the balance
sheet . Both assets and liabilities are separated based on whether they are expected to
be consumed/paid within one year .
Question 10
In what order are assets typically listed on the balance sheet?
A) Alphabetical order
B) By order of liquidity
C) By dollar amount
D) By depreciation rate
Correct Answer: B
