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WGU C213 ACCOUNTING FOR DECISION
MAKERS OBJECTIVE ASSESSMENT EXAM
All Possible Questions and Answers | 2025 Update
Which situation should result in revenue recognition on the
income statement for the year ending 12/31/14 if the firm is using
accrual-basis accounting? .....answer.....In 2014, a company
provides services to a customer for which cash will be
collected the next year (2015)
Which category on the statement of cash flows summarizes cash
receipts and payments to owners and creditors of the company?
.....answer.....Cash flows from financing activities
Where would an investor find a summary of a company's
significant accounting policies? .....answer.....In the notes to the
financial statements
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What does it mean if a company has a debt ratio of 101.5%?
.....answer.....The company has 1.5% more total liabilities that
total assets
Which assurances does an external audit report provide for its
readers? .....answer.....The company's financial statements
fairly reflects its financial position
What is consistent with a continual decline in gross profit if the
firm's cost of goods sold remains the same?
.....answer.....Continual decrease in sales
Which formula yields a cash time interest earned ratio of 11?
.....answer.....Cash before interest and taxes of $11,000/cash
paid for interest of $1,000
Which form of debt should be reported in the long-term liability
category? .....answer.....Notes payable expected to be paid in 18
months
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Which two values affect the measurement of net income?
.....answer.....Dividend paid, operating expenses
Which two items subtotals are included in a multi-step income
statement? .....answer.....gross profit, income from operations
A furniture company using accrual accounting purchased 20 sofas
in November 2011, In December 2011, 8 of the sofas were sold to
customers. The customers all signed contracts agreeing to pay half
the amount owed in February 2012 and the remaining half in
March 2012. At the time of sale, the company was reasonably sure
the customers would pay the amount owed.
In which month should advertising costs be expended?
.....answer.....November 2011
On May 1, 2011, a company using accural accounting purchased
equipment costing $500,000. It expects the equipment to have a
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useful life of five years. At the time of purchase, the company also
purchased a one-year insurance policy on this equipment, which
cost $6,000.
How much insurance expense should the company have
recognized of the year ending in 2011? .....answer.....$4,000
What was the 2012 net profit amount if the 2013 pro-forma net
profit of $187,000 was based on a 22% increase?
.....answer.....$153,279
What is a common category in a statement of cash flows?
.....answer.....Cash from investing activities
Which cash flow category would include cash received from
investors? .....answer.....Cash from financing activites
What does accounting focus on? .....answer.....The impact a
business's activities have on it's overall financial performance
WGU C213 ACCOUNTING FOR DECISION
MAKERS OBJECTIVE ASSESSMENT EXAM
All Possible Questions and Answers | 2025 Update
Which situation should result in revenue recognition on the
income statement for the year ending 12/31/14 if the firm is using
accrual-basis accounting? .....answer.....In 2014, a company
provides services to a customer for which cash will be
collected the next year (2015)
Which category on the statement of cash flows summarizes cash
receipts and payments to owners and creditors of the company?
.....answer.....Cash flows from financing activities
Where would an investor find a summary of a company's
significant accounting policies? .....answer.....In the notes to the
financial statements
,2|Page
What does it mean if a company has a debt ratio of 101.5%?
.....answer.....The company has 1.5% more total liabilities that
total assets
Which assurances does an external audit report provide for its
readers? .....answer.....The company's financial statements
fairly reflects its financial position
What is consistent with a continual decline in gross profit if the
firm's cost of goods sold remains the same?
.....answer.....Continual decrease in sales
Which formula yields a cash time interest earned ratio of 11?
.....answer.....Cash before interest and taxes of $11,000/cash
paid for interest of $1,000
Which form of debt should be reported in the long-term liability
category? .....answer.....Notes payable expected to be paid in 18
months
,3|Page
Which two values affect the measurement of net income?
.....answer.....Dividend paid, operating expenses
Which two items subtotals are included in a multi-step income
statement? .....answer.....gross profit, income from operations
A furniture company using accrual accounting purchased 20 sofas
in November 2011, In December 2011, 8 of the sofas were sold to
customers. The customers all signed contracts agreeing to pay half
the amount owed in February 2012 and the remaining half in
March 2012. At the time of sale, the company was reasonably sure
the customers would pay the amount owed.
In which month should advertising costs be expended?
.....answer.....November 2011
On May 1, 2011, a company using accural accounting purchased
equipment costing $500,000. It expects the equipment to have a
, 4|Page
useful life of five years. At the time of purchase, the company also
purchased a one-year insurance policy on this equipment, which
cost $6,000.
How much insurance expense should the company have
recognized of the year ending in 2011? .....answer.....$4,000
What was the 2012 net profit amount if the 2013 pro-forma net
profit of $187,000 was based on a 22% increase?
.....answer.....$153,279
What is a common category in a statement of cash flows?
.....answer.....Cash from investing activities
Which cash flow category would include cash received from
investors? .....answer.....Cash from financing activites
What does accounting focus on? .....answer.....The impact a
business's activities have on it's overall financial performance
