PASS YOUR 2025 WGU C213 FINAL EXAM
ACCOUNTING FOR DECISION MAKERS ACTUAL
QUESTIONS AND VERIFIED ANSWERS, 100%
GUARANTEE PASS
The emphasis in financial accounting is on which of the following external user groups? - ANSWER-
Investors and creditors
The primary internal group that uses accounting information is - ANSWER-Management
Internal reports are generally used by - ANSWER-Management
Which of the following is NOT an external user of financial information? - ANSWER-Management
Which of the following is NOT true of the Financial Accounting Standards Board (FASB)? - ANSWER-It
is a government agency
Generally accepted accounting principles are - ANSWER-Developed by accounting rule makers
The initials GAAP stand for - ANSWER-Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector - ANSWER-Financial
Accounting Standards Board (FASB)
The initials CPA stand for - ANSWER-Certified Public Accountant
Standards established by the International Accounting Standards Board are referred to as - ANSWER-
International Financial Reporting Standards
Which of the following is NOT a service typically provided by large public accounting firms?
Making management decisions
Performing audits
Redesigning operating procedures
Establishing accounting systems - ANSWER-Making management decisions
Which of the following is the government agency that stipulates the rules and regulations that govern
the collection of taxes in the United States? - ANSWER-Internal Revenue Service
The organization that develops worldwide accounting standards is the - ANSWER-International
Accounting Standards Board (IASB)
Which of the following is NOT a reason for the integration of worldwide accounting standards? -
ANSWER-the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing worldwide
accounting practices? - ANSWER-True
With the current state of information technology, investors outside a company are now allowed
access to a company's internal database of financial information and do their own customized
analysis of a firm's performance.
,True/False - ANSWER-False
Increased federal oversight of the audit process resulted from the passage of the following act of
Congress - - ANSWER-Sarbanes-Oxley Act
A borrower benefits from providing financial information regarding income and expenses in the form
of a lower interest rate on the loan because of reduced uncertainty for the lender with regard to
repayment.
True/False - ANSWER-True
Which of the following is NOT one of the three primary financial statements? - ANSWER-The
Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to reduce uncertainty for
an investor regarding the firm's future financial performance.
True/False - ANSWER-True
Another name for the balance sheet is the - ANSWER-statement of financial position
Which of the following is true of the balance sheet? - ANSWER-It identifies a company's assets and
liabilities as of a specific date.
Markanich Company purchased land for $90,000 in 2010. In 2013, the land is valued at $115,000. The
land would appear on the company's books in 2013 at - ANSWER-$90,000
Which of the following would be considered a long-term liability? - ANSWER-Mortgage payable
Which of the following distinguishes between current and long-term assets? - ANSWER-Classified
balance sheet
Which of the following is the reason that the accounting equation is true by definition? - ANSWER-
Liabilities and owner's equity are the sources that fund the purchase of assets
Which of the following accounts is considered to be the most liquid? - ANSWER-Cash
Which of the following financial statements provides a picture of the enterprise at a particular point
in time? - ANSWER-Balance Sheet
The idea that the activities of the entity are to be separated from those of the individual owner is the
- ANSWER-Separate entity concept
The idea that transactions are recorded at their exchange prices at the transaction date is referred to
as the - ANSWER-Cost principle
Which of the following types of accounts are NOT found on the balance sheet? - ANSWER-Revenues
The idea that businesses must be accounted for as though they will exist at least for the foreseeable
future is the - ANSWER-Going concern concept
Expense and revenue accounts appear on the - ANSWER-Income statement
Another name for the income statement is - ANSWER-Statement of earnings
Revenues cause - ANSWER-An increase in net assets
,Costs that are incurred during the normal operations of a business to generate revenues are called -
ANSWER-Expenses
The financial statement that presents a summary of the revenues and expenses of a business for a
specific period of time, such as a month or a year, is called a(n) - ANSWER-Income Statement
Which of the following would be included on an income statement? - ANSWER-Rent expense
Expenses generally cause - ANSWER-A decrease in net assets
Which of the following activities would NOT be classified as an investing activity? - ANSWER-Purchase
of inventory
Which of the following classifications refers to those activities whereby cash is obtained or repaid to
owners and creditors? - ANSWER-Financing
During the month, Meridian Company had the following cash transactions:
Cash collected from customers
$ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
(5,750)
Cash paid for the purchase of a building
(15,000)
Cash received for the issuance of new shares of stock
2,600
Cash received from sale of land
6,400
Cash paid for rent
(2,500)
Cash paid for dividends
(1,500)
Given the above information, compute cash flow from operating activities. - ANSWER-$4,250
Operating activities: $12,500 - $5,750 - $2,500 = $4,250
Which of the following classifications refers to those activities that are part of the day-to-day business
of a company? - ANSWER-Operating
Which of the following classifications refers to those activities associated with buying and selling long-
term assets? - ANSWER-Investing
Vital information that CANNOT be captured solely by dollar amounts is reported in a firm's - ANSWER-
Notes to financial statements
Which of the following is NOT one of the four general types of financial statement notes? - ANSWER-
Supplementary information required by the Internal Revenue Service
Which of the following is an example of a significant accounting policy that would be explained in the
notes to the financial statements? - ANSWER-The method used to estimate depreciation on a piece of
equipment
Which of the following is an example of a disclosure of information NOT recognized that would be
explained in the notes to the financial statements? - ANSWER-The disclosure of the uncertain,
potential outcome of a lawsuit
, Which of the following is an example of additional information about summary totals that would be
explained in the notes to the financial statements? - ANSWER-The description of all the individual
items that comprise notes payable
An independent audit report is usually issued by - ANSWER-A certified public accountant
In completing an audit of a company's financial statements, - ANSWER-Provide some assurance that
the financial statements are not misleading
The accuracy of the information contained in the financial statements is the responsibility of the -
ANSWER-Management
Which of the following are the two economic factors that enable us to trust an independent auditor
despite the fact that the auditor was hired by the company being audited? - ANSWER-Reputation of
auditor and risk of lawsuits
The idea that certain figures on an operating statement help to explain changes in figures on
comparative balance sheets is referred to as - ANSWER-Articulation
The idea that information becomes more useful when it can be related to a benchmark or a standard
is referred to as - ANSWER-Comparability
The notion that when doubt exists concerning two or more reporting alternatives, users should select
the alternative with the least favorable impact on reported income, assets, and liabilities is referred to
as - ANSWER-Conservatism
Whether an item is big enough that proper accounting will make a difference to users of accounting
information is referred to as - ANSWER-Materiality
The notion that information will be more useful if it will impact a decision is referred to as - ANSWER-
Relevance
The following data were taken from the records of Moss Corporation for the year ending December
31, 2012:
01/01/12
12/31/12
Assets
$11,250
?
Liabilities
8,580
$10,365
Owners' equity
?
6,465
Given the above information, owners' equity on January 1, 2012 was - ANSWER-$2,670
Owners' equity: $11,250 - $8,580 = $2,670
Distributions by a corporation to its stockholders are called - ANSWER-Dividends
Which of the following accounts is NOT an asset account? - ANSWER-Accounts Payable
Which of the following decreases owners' equity? - ANSWER-Operations generate a loss
ACCOUNTING FOR DECISION MAKERS ACTUAL
QUESTIONS AND VERIFIED ANSWERS, 100%
GUARANTEE PASS
The emphasis in financial accounting is on which of the following external user groups? - ANSWER-
Investors and creditors
The primary internal group that uses accounting information is - ANSWER-Management
Internal reports are generally used by - ANSWER-Management
Which of the following is NOT an external user of financial information? - ANSWER-Management
Which of the following is NOT true of the Financial Accounting Standards Board (FASB)? - ANSWER-It
is a government agency
Generally accepted accounting principles are - ANSWER-Developed by accounting rule makers
The initials GAAP stand for - ANSWER-Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector - ANSWER-Financial
Accounting Standards Board (FASB)
The initials CPA stand for - ANSWER-Certified Public Accountant
Standards established by the International Accounting Standards Board are referred to as - ANSWER-
International Financial Reporting Standards
Which of the following is NOT a service typically provided by large public accounting firms?
Making management decisions
Performing audits
Redesigning operating procedures
Establishing accounting systems - ANSWER-Making management decisions
Which of the following is the government agency that stipulates the rules and regulations that govern
the collection of taxes in the United States? - ANSWER-Internal Revenue Service
The organization that develops worldwide accounting standards is the - ANSWER-International
Accounting Standards Board (IASB)
Which of the following is NOT a reason for the integration of worldwide accounting standards? -
ANSWER-the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing worldwide
accounting practices? - ANSWER-True
With the current state of information technology, investors outside a company are now allowed
access to a company's internal database of financial information and do their own customized
analysis of a firm's performance.
,True/False - ANSWER-False
Increased federal oversight of the audit process resulted from the passage of the following act of
Congress - - ANSWER-Sarbanes-Oxley Act
A borrower benefits from providing financial information regarding income and expenses in the form
of a lower interest rate on the loan because of reduced uncertainty for the lender with regard to
repayment.
True/False - ANSWER-True
Which of the following is NOT one of the three primary financial statements? - ANSWER-The
Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to reduce uncertainty for
an investor regarding the firm's future financial performance.
True/False - ANSWER-True
Another name for the balance sheet is the - ANSWER-statement of financial position
Which of the following is true of the balance sheet? - ANSWER-It identifies a company's assets and
liabilities as of a specific date.
Markanich Company purchased land for $90,000 in 2010. In 2013, the land is valued at $115,000. The
land would appear on the company's books in 2013 at - ANSWER-$90,000
Which of the following would be considered a long-term liability? - ANSWER-Mortgage payable
Which of the following distinguishes between current and long-term assets? - ANSWER-Classified
balance sheet
Which of the following is the reason that the accounting equation is true by definition? - ANSWER-
Liabilities and owner's equity are the sources that fund the purchase of assets
Which of the following accounts is considered to be the most liquid? - ANSWER-Cash
Which of the following financial statements provides a picture of the enterprise at a particular point
in time? - ANSWER-Balance Sheet
The idea that the activities of the entity are to be separated from those of the individual owner is the
- ANSWER-Separate entity concept
The idea that transactions are recorded at their exchange prices at the transaction date is referred to
as the - ANSWER-Cost principle
Which of the following types of accounts are NOT found on the balance sheet? - ANSWER-Revenues
The idea that businesses must be accounted for as though they will exist at least for the foreseeable
future is the - ANSWER-Going concern concept
Expense and revenue accounts appear on the - ANSWER-Income statement
Another name for the income statement is - ANSWER-Statement of earnings
Revenues cause - ANSWER-An increase in net assets
,Costs that are incurred during the normal operations of a business to generate revenues are called -
ANSWER-Expenses
The financial statement that presents a summary of the revenues and expenses of a business for a
specific period of time, such as a month or a year, is called a(n) - ANSWER-Income Statement
Which of the following would be included on an income statement? - ANSWER-Rent expense
Expenses generally cause - ANSWER-A decrease in net assets
Which of the following activities would NOT be classified as an investing activity? - ANSWER-Purchase
of inventory
Which of the following classifications refers to those activities whereby cash is obtained or repaid to
owners and creditors? - ANSWER-Financing
During the month, Meridian Company had the following cash transactions:
Cash collected from customers
$ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
(5,750)
Cash paid for the purchase of a building
(15,000)
Cash received for the issuance of new shares of stock
2,600
Cash received from sale of land
6,400
Cash paid for rent
(2,500)
Cash paid for dividends
(1,500)
Given the above information, compute cash flow from operating activities. - ANSWER-$4,250
Operating activities: $12,500 - $5,750 - $2,500 = $4,250
Which of the following classifications refers to those activities that are part of the day-to-day business
of a company? - ANSWER-Operating
Which of the following classifications refers to those activities associated with buying and selling long-
term assets? - ANSWER-Investing
Vital information that CANNOT be captured solely by dollar amounts is reported in a firm's - ANSWER-
Notes to financial statements
Which of the following is NOT one of the four general types of financial statement notes? - ANSWER-
Supplementary information required by the Internal Revenue Service
Which of the following is an example of a significant accounting policy that would be explained in the
notes to the financial statements? - ANSWER-The method used to estimate depreciation on a piece of
equipment
Which of the following is an example of a disclosure of information NOT recognized that would be
explained in the notes to the financial statements? - ANSWER-The disclosure of the uncertain,
potential outcome of a lawsuit
, Which of the following is an example of additional information about summary totals that would be
explained in the notes to the financial statements? - ANSWER-The description of all the individual
items that comprise notes payable
An independent audit report is usually issued by - ANSWER-A certified public accountant
In completing an audit of a company's financial statements, - ANSWER-Provide some assurance that
the financial statements are not misleading
The accuracy of the information contained in the financial statements is the responsibility of the -
ANSWER-Management
Which of the following are the two economic factors that enable us to trust an independent auditor
despite the fact that the auditor was hired by the company being audited? - ANSWER-Reputation of
auditor and risk of lawsuits
The idea that certain figures on an operating statement help to explain changes in figures on
comparative balance sheets is referred to as - ANSWER-Articulation
The idea that information becomes more useful when it can be related to a benchmark or a standard
is referred to as - ANSWER-Comparability
The notion that when doubt exists concerning two or more reporting alternatives, users should select
the alternative with the least favorable impact on reported income, assets, and liabilities is referred to
as - ANSWER-Conservatism
Whether an item is big enough that proper accounting will make a difference to users of accounting
information is referred to as - ANSWER-Materiality
The notion that information will be more useful if it will impact a decision is referred to as - ANSWER-
Relevance
The following data were taken from the records of Moss Corporation for the year ending December
31, 2012:
01/01/12
12/31/12
Assets
$11,250
?
Liabilities
8,580
$10,365
Owners' equity
?
6,465
Given the above information, owners' equity on January 1, 2012 was - ANSWER-$2,670
Owners' equity: $11,250 - $8,580 = $2,670
Distributions by a corporation to its stockholders are called - ANSWER-Dividends
Which of the following accounts is NOT an asset account? - ANSWER-Accounts Payable
Which of the following decreases owners' equity? - ANSWER-Operations generate a loss
