Western Governors University | Accounting for Decision Makers
WGU C213 Accounting for Decision Makers Objective
Assessment 2026/2027 | Verified Questions
Western Governors University | Accounting for Decision Makers | Professional Business Candidates
250 Verified Questions | 5 Core Domains | Academic Year 2026/2027
Prepared by
Western Governors University | Accounting for Decision Makers
Objective Assessment Actual Exam | Academic Year 2026/2027
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
,INTRODUCTION
This document contains 250 original verified questions that comprehensively cover the full WGU C213
Accounting for Decision Makers Objective Assessment for the 2026/2027 academic year. The questions
are organized across five core domains: Financial Accounting Fundamentals & The Accounting Cycle;
Financial Statement Preparation & Analysis; Managerial Accounting & Cost Concepts; Cost-Volume-Profit
Analysis & Budgeting; and Capital Investment, Internal Controls & Ethics. Content is original and
designed to reinforce the official Western Governors University C213 course competencies for actual exam
readiness and accounting proficiency, aligned to the 2026/2027 academic year.
ACTUAL QUESTIONS
Domain 1: Financial Accounting Fundamentals & The Accounting Cycle
Question 1. The fundamental accounting equation is expressed as:
A. Assets = Liabilities − Equity
B. Assets = Liabilities + Equity
C. Assets + Liabilities = Equity
D. Revenue = Expenses + Equity
Correct Answer: C
Rationale: The accounting equation states that Assets equal Liabilities plus Equity, reflecting the
residual claim of owners after creditors.
Question 2. Which body has primary authority to establish generally accepted accounting
principles (GAAP) for U.S. public companies?
A. IASB
B. FASB
C. PCAOB
D. IRS
Correct Answer: A
Rationale: The Financial Accounting Standards Board (FASB) is the private-sector body designated to
establish U.S. GAAP; the SEC retains statutory oversight.
Question 3. Double-entry bookkeeping requires that every transaction:
A. Affect only one account
B. Affect at least two accounts with equal debits and credits
C. Be recorded only in the general journal
D. Increase equity
Correct Answer: C
Rationale: Every transaction is recorded with equal total debits and credits so that the accounting
equation remains in balance.
Question 4. A debit to an asset account:
A. Decreases the asset
B. Increases the asset
C. Increases a liability
D. Decreases equity always
Correct Answer: B
Rationale: Asset accounts normally have debit balances; a debit increases the asset balance.
Question 5. Revenue is recognized under the accrual basis when:
A. Cash is received
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
, B. It is earned, regardless of when cash is received
C. The invoice is mailed
D. The fiscal year ends
Correct Answer: D
Rationale: Accrual accounting recognizes revenue when performance obligations are satisfied (earned),
not necessarily when cash is collected.
Question 6. An adjusting entry that debits Unearned Revenue and credits Service Revenue
is an example of:
A. An accrual of revenue
B. A deferral (recognition of previously unearned revenue)
C. A closing entry
D. A correcting entry
Correct Answer: B
Rationale: The entry converts a liability (unearned revenue) into earned revenue when the service is
performed.
Question 7. The purpose of closing entries is to:
A. Update asset balances
B. Transfer temporary account balances to retained earnings (or capital) and zero the temporary
accounts
C. Record depreciation
D. Adjust inventory
Correct Answer: C
Rationale: Closing entries reset revenue, expense, and dividend accounts to zero and update the
retained-earnings balance for the next period.
Question 8. The cost principle requires that assets be recorded at:
A. Current fair value
B. Historical cost (original exchange price)
C. Replacement cost
D. Net realizable value always
Correct Answer: D
Rationale: Under the historical-cost principle, most assets are initially recorded at the cash or cash-
equivalent amount given to acquire them.
Question 9. The going-concern assumption means that:
A. The business will liquidate within one year
B. The business will continue operating for the foreseeable future
C. Assets are reported at liquidation value
D. Only cash-basis accounting is used
Correct Answer: B
Rationale: The going-concern assumption supports the use of historical cost and systematic
depreciation rather than liquidation values.
Question 10. The economic-entity assumption requires that:
A. Owner transactions be combined with business transactions
B. Business transactions be kept separate from the owner’s personal transactions
C. Only cash transactions be recorded
D. All subsidiaries be ignored
Correct Answer: D
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
, Rationale: The economic-entity assumption treats the business as a distinct unit from its owners and
other entities.
Question 11. Which account is increased by a credit?
A. Cash
B. Accounts Payable
C. Accounts Receivable
D. Dividends
Correct Answer: B
Rationale: Liability accounts such as Accounts Payable have normal credit balances; a credit increases
the liability.
Question 12. A trial balance that is in balance indicates that:
A. All account balances are correct
B. Total debits equal total credits
C. No adjusting entries are needed
D. The financial statements are free of error
Correct Answer: A
Rationale: A balanced trial balance confirms only that debits equal credits; it does not guarantee that
every account is correct.
Question 13. Depreciation is an example of:
A. An accrual of an expense
B. A deferral (allocation of a previously recorded asset cost)
C. A cash outflow
D. A closing entry
Correct Answer: B
Rationale: Depreciation systematically allocates the cost of a long-lived asset to expense over its useful
life.
Question 14. The matching principle requires that:
A. Expenses be recorded in the same period as the revenues they help generate
B. All expenses be paid in cash immediately
C. Revenue be recorded only when cash is received
D. Assets be reported at fair value
Correct Answer: D
Rationale: The matching principle links expenses with the revenues of the same period so that net
income is a meaningful measure of performance.
Question 15. Which of the following is a permanent account?
A. Service Revenue
B. Retained Earnings
C. Salaries Expense
D. Dividends
Correct Answer: C
Rationale: Permanent (real) accounts—assets, liabilities, and equity—carry their balances forward;
temporary accounts are closed.
Question 16. The normal balance of an expense account is a:
A. Credit
B. Debit
C. Zero balance always
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
WGU C213 Accounting for Decision Makers Objective
Assessment 2026/2027 | Verified Questions
Western Governors University | Accounting for Decision Makers | Professional Business Candidates
250 Verified Questions | 5 Core Domains | Academic Year 2026/2027
Prepared by
Western Governors University | Accounting for Decision Makers
Objective Assessment Actual Exam | Academic Year 2026/2027
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
,INTRODUCTION
This document contains 250 original verified questions that comprehensively cover the full WGU C213
Accounting for Decision Makers Objective Assessment for the 2026/2027 academic year. The questions
are organized across five core domains: Financial Accounting Fundamentals & The Accounting Cycle;
Financial Statement Preparation & Analysis; Managerial Accounting & Cost Concepts; Cost-Volume-Profit
Analysis & Budgeting; and Capital Investment, Internal Controls & Ethics. Content is original and
designed to reinforce the official Western Governors University C213 course competencies for actual exam
readiness and accounting proficiency, aligned to the 2026/2027 academic year.
ACTUAL QUESTIONS
Domain 1: Financial Accounting Fundamentals & The Accounting Cycle
Question 1. The fundamental accounting equation is expressed as:
A. Assets = Liabilities − Equity
B. Assets = Liabilities + Equity
C. Assets + Liabilities = Equity
D. Revenue = Expenses + Equity
Correct Answer: C
Rationale: The accounting equation states that Assets equal Liabilities plus Equity, reflecting the
residual claim of owners after creditors.
Question 2. Which body has primary authority to establish generally accepted accounting
principles (GAAP) for U.S. public companies?
A. IASB
B. FASB
C. PCAOB
D. IRS
Correct Answer: A
Rationale: The Financial Accounting Standards Board (FASB) is the private-sector body designated to
establish U.S. GAAP; the SEC retains statutory oversight.
Question 3. Double-entry bookkeeping requires that every transaction:
A. Affect only one account
B. Affect at least two accounts with equal debits and credits
C. Be recorded only in the general journal
D. Increase equity
Correct Answer: C
Rationale: Every transaction is recorded with equal total debits and credits so that the accounting
equation remains in balance.
Question 4. A debit to an asset account:
A. Decreases the asset
B. Increases the asset
C. Increases a liability
D. Decreases equity always
Correct Answer: B
Rationale: Asset accounts normally have debit balances; a debit increases the asset balance.
Question 5. Revenue is recognized under the accrual basis when:
A. Cash is received
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
, B. It is earned, regardless of when cash is received
C. The invoice is mailed
D. The fiscal year ends
Correct Answer: D
Rationale: Accrual accounting recognizes revenue when performance obligations are satisfied (earned),
not necessarily when cash is collected.
Question 6. An adjusting entry that debits Unearned Revenue and credits Service Revenue
is an example of:
A. An accrual of revenue
B. A deferral (recognition of previously unearned revenue)
C. A closing entry
D. A correcting entry
Correct Answer: B
Rationale: The entry converts a liability (unearned revenue) into earned revenue when the service is
performed.
Question 7. The purpose of closing entries is to:
A. Update asset balances
B. Transfer temporary account balances to retained earnings (or capital) and zero the temporary
accounts
C. Record depreciation
D. Adjust inventory
Correct Answer: C
Rationale: Closing entries reset revenue, expense, and dividend accounts to zero and update the
retained-earnings balance for the next period.
Question 8. The cost principle requires that assets be recorded at:
A. Current fair value
B. Historical cost (original exchange price)
C. Replacement cost
D. Net realizable value always
Correct Answer: D
Rationale: Under the historical-cost principle, most assets are initially recorded at the cash or cash-
equivalent amount given to acquire them.
Question 9. The going-concern assumption means that:
A. The business will liquidate within one year
B. The business will continue operating for the foreseeable future
C. Assets are reported at liquidation value
D. Only cash-basis accounting is used
Correct Answer: B
Rationale: The going-concern assumption supports the use of historical cost and systematic
depreciation rather than liquidation values.
Question 10. The economic-entity assumption requires that:
A. Owner transactions be combined with business transactions
B. Business transactions be kept separate from the owner’s personal transactions
C. Only cash transactions be recorded
D. All subsidiaries be ignored
Correct Answer: D
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
, Rationale: The economic-entity assumption treats the business as a distinct unit from its owners and
other entities.
Question 11. Which account is increased by a credit?
A. Cash
B. Accounts Payable
C. Accounts Receivable
D. Dividends
Correct Answer: B
Rationale: Liability accounts such as Accounts Payable have normal credit balances; a credit increases
the liability.
Question 12. A trial balance that is in balance indicates that:
A. All account balances are correct
B. Total debits equal total credits
C. No adjusting entries are needed
D. The financial statements are free of error
Correct Answer: A
Rationale: A balanced trial balance confirms only that debits equal credits; it does not guarantee that
every account is correct.
Question 13. Depreciation is an example of:
A. An accrual of an expense
B. A deferral (allocation of a previously recorded asset cost)
C. A cash outflow
D. A closing entry
Correct Answer: B
Rationale: Depreciation systematically allocates the cost of a long-lived asset to expense over its useful
life.
Question 14. The matching principle requires that:
A. Expenses be recorded in the same period as the revenues they help generate
B. All expenses be paid in cash immediately
C. Revenue be recorded only when cash is received
D. Assets be reported at fair value
Correct Answer: D
Rationale: The matching principle links expenses with the revenues of the same period so that net
income is a meaningful measure of performance.
Question 15. Which of the following is a permanent account?
A. Service Revenue
B. Retained Earnings
C. Salaries Expense
D. Dividends
Correct Answer: C
Rationale: Permanent (real) accounts—assets, liabilities, and equity—carry their balances forward;
temporary accounts are closed.
Question 16. The normal balance of an expense account is a:
A. Credit
B. Debit
C. Zero balance always
WGU C213 Accounting for Decision Makers Objective Assessment 2026/2027 | Verified Questions
