WGU C213 OBJECTIVE ASSESSMENT
ACCOUNTING FOR DECISION MAKERS
REVIEW (LATEST 2026/2027 UPDATE)
100 VERIFIED QUESTIONS & ANSWERS
GRADE A
SECTION 1: ACCOUNTING FUNDAMENTALS & GAAP
(QUESTIONS 1–20)
Question 1
What does accounting focus on?
A. The impact a business's activities have on its relationships with customers
B. The impact a business's activities have on the environment
C. The impact a business's activities have on its overall financial performance
D. The impact a business's activities have on its public image
Answer: C
Rationale: Accounting focuses on identifying, measuring, and
communicating the financial effects of business activities. These
measurements help stakeholders evaluate profitability, liquidity, and
financial stability. While accounting information may assist in forecasting
and planning, its core purpose is reporting financial performance.
Question 2
What is the primary objective of financial accounting?
,A. To provide detailed information for a company's internal management team
B. To report the financial performance and position of the company to external
stakeholders
C. To calculate the exact amount of taxes owed to government agencies
D. To track the daily cash transactions to prevent fraud
Answer: B
Rationale: Financial accounting focuses on creating standardized financial
statements (income statement, balance sheet, cash flow statement) for
external users like investors, creditors, and regulators. Managerial
accounting serves internal decision-making.
Question 3
Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time?
A. Income statement
B. Balance sheet
C. Statement of cash flows
D. Statement of retained earnings
Answer: C
Rationale: The statement of cash flows explains how cash moves through a
business over a specific period. It separates cash activity into operating,
investing, and financing categories. This helps users understand liquidity
and cash sustainability.
Question 4
Which users would have a primary concern with an organization's ability to
provide healthcare benefits?
,A. Suppliers
B. Employees
C. Vendors
D. Competitors
Answer: B
Rationale: Employees have a primary concern with an organization's ability
to provide healthcare benefits, as these benefits are part of their
compensation package and affect their overall well-being. Suppliers and
vendors are more concerned with the company's ability to pay for goods and
services.
Question 5
Which body regulates a certified public accounting firm's audit practices when
the firm is auditing a large publicly traded company?
A. Financial Accounting Standards Board (FASB)
B. Securities and Exchange Commission (SEC)
C. Public Company Accounting Oversight Board (PCAOB)
D. American Institute of CPAs (AICPA)
Answer: C
Rationale: The Public Company Accounting Oversight Board (PCAOB) is a
nonprofit corporation established by the Sarbanes-Oxley Act of 2002 to
oversee the audits of public companies. Its purpose is to protect investors
and the public interest by promoting informative, fair, and independent audit
reports.
Question 6
What has had the most significant impact on accounting practices?
, A. Government regulations
B. Information technology
C. Globalization
D. Tax laws
Answer: B
Rationale: Information technology has had the most significant impact on
accounting practices by automating processes, improving accuracy, enabling
real-time reporting, and facilitating data analysis. IT has transformed how
financial information is recorded, stored, and communicated.
Question 7
What two items of information are revealed on the balance sheet? (Select two
answers.)
A. Ownership
B. Debt
C. Revenue
D. Expenses
Answer: A, B
Rationale: The balance sheet reveals information about a company's
ownership (equity) and debt (liabilities). Ownership is represented by
stockholders' equity or owners' equity, while debt is represented by
liabilities. Revenue and expenses are reported on the income statement.
Question 8
Which term is defined as the residual interest in the net assets of a company?
A. Assets
B. Liabilities
ACCOUNTING FOR DECISION MAKERS
REVIEW (LATEST 2026/2027 UPDATE)
100 VERIFIED QUESTIONS & ANSWERS
GRADE A
SECTION 1: ACCOUNTING FUNDAMENTALS & GAAP
(QUESTIONS 1–20)
Question 1
What does accounting focus on?
A. The impact a business's activities have on its relationships with customers
B. The impact a business's activities have on the environment
C. The impact a business's activities have on its overall financial performance
D. The impact a business's activities have on its public image
Answer: C
Rationale: Accounting focuses on identifying, measuring, and
communicating the financial effects of business activities. These
measurements help stakeholders evaluate profitability, liquidity, and
financial stability. While accounting information may assist in forecasting
and planning, its core purpose is reporting financial performance.
Question 2
What is the primary objective of financial accounting?
,A. To provide detailed information for a company's internal management team
B. To report the financial performance and position of the company to external
stakeholders
C. To calculate the exact amount of taxes owed to government agencies
D. To track the daily cash transactions to prevent fraud
Answer: B
Rationale: Financial accounting focuses on creating standardized financial
statements (income statement, balance sheet, cash flow statement) for
external users like investors, creditors, and regulators. Managerial
accounting serves internal decision-making.
Question 3
Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time?
A. Income statement
B. Balance sheet
C. Statement of cash flows
D. Statement of retained earnings
Answer: C
Rationale: The statement of cash flows explains how cash moves through a
business over a specific period. It separates cash activity into operating,
investing, and financing categories. This helps users understand liquidity
and cash sustainability.
Question 4
Which users would have a primary concern with an organization's ability to
provide healthcare benefits?
,A. Suppliers
B. Employees
C. Vendors
D. Competitors
Answer: B
Rationale: Employees have a primary concern with an organization's ability
to provide healthcare benefits, as these benefits are part of their
compensation package and affect their overall well-being. Suppliers and
vendors are more concerned with the company's ability to pay for goods and
services.
Question 5
Which body regulates a certified public accounting firm's audit practices when
the firm is auditing a large publicly traded company?
A. Financial Accounting Standards Board (FASB)
B. Securities and Exchange Commission (SEC)
C. Public Company Accounting Oversight Board (PCAOB)
D. American Institute of CPAs (AICPA)
Answer: C
Rationale: The Public Company Accounting Oversight Board (PCAOB) is a
nonprofit corporation established by the Sarbanes-Oxley Act of 2002 to
oversee the audits of public companies. Its purpose is to protect investors
and the public interest by promoting informative, fair, and independent audit
reports.
Question 6
What has had the most significant impact on accounting practices?
, A. Government regulations
B. Information technology
C. Globalization
D. Tax laws
Answer: B
Rationale: Information technology has had the most significant impact on
accounting practices by automating processes, improving accuracy, enabling
real-time reporting, and facilitating data analysis. IT has transformed how
financial information is recorded, stored, and communicated.
Question 7
What two items of information are revealed on the balance sheet? (Select two
answers.)
A. Ownership
B. Debt
C. Revenue
D. Expenses
Answer: A, B
Rationale: The balance sheet reveals information about a company's
ownership (equity) and debt (liabilities). Ownership is represented by
stockholders' equity or owners' equity, while debt is represented by
liabilities. Revenue and expenses are reported on the income statement.
Question 8
Which term is defined as the residual interest in the net assets of a company?
A. Assets
B. Liabilities
