WGU C213 Accounting for Decision Makers
Objective Assessment (OA) Exam | Complete
Actual Exam Questions with Verified Answers and
Rationales | Latest Update 2026/2027 | Already
Graded A+
Question 1
What is the term for the ability a company has to pay its debts in the short run?
A. Solvency
B. Profitability
C. Liquidity
D. Leverage
Answer: C
Rationale: Liquidity refers to a company's ability to meet its short-term
obligations.
Question 2
Which of the following ratios is used to measure the liquid position of a
corporation?
A. Debt ratio
B. Current ratio
C. Return on equity
D. Times interest earned
Answer: B
Rationale: The current ratio (Current Assets / Current Liabilities) is the standard
measure of short-term liquidity.
pg. 1
,Question 3
Which of the following ratios is used to measure a firm's leverage?
A. Debt Ratio
B. Current Ratio
C. Return on Equity
D. Gross Margin
Answer: A
Rationale: The debt ratio measures the proportion of a company's assets financed
by debt (leverage).
Question 4
Which of the following ratios measures the profit earned on each dollar invested by
the owners?
A. Return on Sales
B. Asset Turnover
C. Return on Equity
D. Current Ratio
Answer: C
Rationale: Return on Equity (Net Income / Total Equity) measures the return
generated on owners' investments.
Question 5
The emphasis in financial accounting is primarily on which external user group?
A. Management
B. Investors and creditors
C. Government regulators
D. Internal auditors
Answer: B
pg. 2
,Rationale: Financial accounting focuses on providing information to external
users, specifically investors and creditors.
Question 6
What is the primary internal group that uses accounting information?
A. Creditors
B. Management
C. SEC
D. Tax authorities
Answer: B
Rationale: Management uses internal accounting information for planning,
controlling, and decision-making.
Question 7
Internal reports are generally used by:
A. Lenders
B. Creditors
C. Management
D. Suppliers
Answer: C
Rationale: Internal reports are prepared for and utilized by management.
Question 8
Which of the following is NOT an external user of financial information?
A. Customers
B. Management
C. Suppliers
D. Lenders
pg. 3
, Answer: B
Rationale: Management is an internal user, whereas customers, suppliers, and
lenders are external users.
Question 9
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)?
A. It is a non-profit organization
B. It is a government agency
C. It is funded by private contributions
D. It is overseen by the SEC
Answer: B
Rationale: The FASB is a private, non-profit organization, not a government
agency.
Question 10
Generally accepted accounting principles (GAAP) are:
A. Based on scientific proofs
B. Natural laws
C. Developed by accounting rule makers
D. Derived from tax regulations
Answer: C
Rationale: GAAP is developed by accounting rule-making bodies like the FASB.
Question 11
What do the initials GAAP stand for?
A. Generally Accepted Auditing Principles
B. General Accounting and Auditing Protocols
pg. 4
Objective Assessment (OA) Exam | Complete
Actual Exam Questions with Verified Answers and
Rationales | Latest Update 2026/2027 | Already
Graded A+
Question 1
What is the term for the ability a company has to pay its debts in the short run?
A. Solvency
B. Profitability
C. Liquidity
D. Leverage
Answer: C
Rationale: Liquidity refers to a company's ability to meet its short-term
obligations.
Question 2
Which of the following ratios is used to measure the liquid position of a
corporation?
A. Debt ratio
B. Current ratio
C. Return on equity
D. Times interest earned
Answer: B
Rationale: The current ratio (Current Assets / Current Liabilities) is the standard
measure of short-term liquidity.
pg. 1
,Question 3
Which of the following ratios is used to measure a firm's leverage?
A. Debt Ratio
B. Current Ratio
C. Return on Equity
D. Gross Margin
Answer: A
Rationale: The debt ratio measures the proportion of a company's assets financed
by debt (leverage).
Question 4
Which of the following ratios measures the profit earned on each dollar invested by
the owners?
A. Return on Sales
B. Asset Turnover
C. Return on Equity
D. Current Ratio
Answer: C
Rationale: Return on Equity (Net Income / Total Equity) measures the return
generated on owners' investments.
Question 5
The emphasis in financial accounting is primarily on which external user group?
A. Management
B. Investors and creditors
C. Government regulators
D. Internal auditors
Answer: B
pg. 2
,Rationale: Financial accounting focuses on providing information to external
users, specifically investors and creditors.
Question 6
What is the primary internal group that uses accounting information?
A. Creditors
B. Management
C. SEC
D. Tax authorities
Answer: B
Rationale: Management uses internal accounting information for planning,
controlling, and decision-making.
Question 7
Internal reports are generally used by:
A. Lenders
B. Creditors
C. Management
D. Suppliers
Answer: C
Rationale: Internal reports are prepared for and utilized by management.
Question 8
Which of the following is NOT an external user of financial information?
A. Customers
B. Management
C. Suppliers
D. Lenders
pg. 3
, Answer: B
Rationale: Management is an internal user, whereas customers, suppliers, and
lenders are external users.
Question 9
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)?
A. It is a non-profit organization
B. It is a government agency
C. It is funded by private contributions
D. It is overseen by the SEC
Answer: B
Rationale: The FASB is a private, non-profit organization, not a government
agency.
Question 10
Generally accepted accounting principles (GAAP) are:
A. Based on scientific proofs
B. Natural laws
C. Developed by accounting rule makers
D. Derived from tax regulations
Answer: C
Rationale: GAAP is developed by accounting rule-making bodies like the FASB.
Question 11
What do the initials GAAP stand for?
A. Generally Accepted Auditing Principles
B. General Accounting and Auditing Protocols
pg. 4
