1|Page
WGU C213 Exam Q&A| Accounting for
Decision Makers | Latest 2026/2027
100% Correct Grade A
Exam Structure:
Subject: Accounting for Decision Makers
Source: WGU C213 Exam Guide
Format: Questions & Answers with Rationales
1. The emphasis in financial accounting is on which of the following
external user groups?
A. investors and creditors
Correct Answer: investors and creditors
Rationale:
1. Financial accounting focuses on providing information to parties outside
the organization.
2. Investors and creditors are the primary external users for making decisions
about providing capital.
2. The primary internal group that uses accounting information is?
A. management
Correct Answer: management
Rationale:
1. Managerial accounting is designed for internal use.
*2. Management uses this information for planning, controlling, and
decision-making within the company.*
3. Internal reports are generally used by:
A. management
Correct Answer: management
Rationale:
1. Internal reports are not distributed externally.
, 2|Page
2. They are prepared specifically to aid managers in operational and strategic
decisions.
4. Which of the following is NOT an external user of financial
information?
A. management
Correct Answer: management
Rationale:
1. External users include investors, creditors, and regulators.
2. Management is an internal user, as they are part of the company's
operations.
5. Who is FASB?
Correct Answer: Financial Accounting Standards Board
Rationale:
*1. FASB is the primary standard-setting body for U.S. GAAP.*
*2. It is a private, not-for-profit organization.*
6. What does the FASB do?
A. sets accounting standards in the U.S.
B. Private Group (Not government)
Correct Answer: sets accounting standards in the U.S.; Private Group (Not
government)
Rationale:
1. The FASB establishes Generally Accepted Accounting Principles (GAAP) for
the United States.
2. It operates independently of the federal government.
7. What does GAAP stand for?
Correct Answer: Generally Accepted Accounting Principles
Rationale:
1. GAAP is the framework of accounting rules, standards, and procedures used
in the U.S.
2. It ensures consistency, comparability, and reliability of financial
statements.
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8. Which of the following is NOT true of the Financial Accounting
Standards Board (FASB)?
A. It seeks consistency for its proposed standards
B. It is a government agency
C. It has no legal power to enforce the standards it sets
D. It consists of seven full-time members
Correct Answer: It is a government agency
Rationale:
*1. The FASB is a private-sector organization.*
2. While its standards are authoritative, it does not have direct legal
enforcement power; the SEC provides legal authority for public companies.
9. Generally accepted accounting principles are:
A. Developed by accounting rule makers
Correct Answer: Developed by accounting rule makers
Rationale:
*1. GAAP is established by designated standard-setting bodies like the FASB
and the SEC.*
2. They are not laws passed by legislatures but are developed through a due
process involving accounting professionals.
10. What is the SEC? And what do they do?
Correct Answer: Securities and Exchange Commission. U.S. government
agency that is in charge of keeping an eye on corporations, and are
responsible for ensuring that investors, creditors, and other financial
statement users are provided with reliable information.
Rationale:
1. The SEC is a federal government agency.
2. Its mission is to protect investors, maintain fair markets, and facilitate
capital formation by requiring full and accurate financial disclosure.
11. Who is the AICPA?
Correct Answer: American Institute of Certified Public Accountants
Rationale:
1. The AICPA is the national professional organization for CPAs in the United
States.
2. It sets ethical and professional standards for the accounting profession.
, 4|Page
12. What does the AICPA do?
A. sets professional requirements for CPAs
B. conducts research
C. publishes materials on many different subjects related to accounting,
auditing, attestation and assurance services, management consulting
services, and taxes
Correct Answer: sets professional requirements for CPAs; conducts
research; publishes materials on many different subjects related to
accounting, auditing, attestation and assurance services, management
consulting services, and taxes
Rationale:
1. The AICPA develops the CPA exam and sets continuing professional
education requirements.
2. It issues guidance on technical accounting and auditing matters through
publications and research.
13. What is the Sarbanes-Oxley Act?
Correct Answer: An act passed into law by Congress in 2002 to establish
strict accounting and reporting rules in order to make senior managers
more accountable and to improve and maintain investor confidence.
Rationale:
1. SOX was enacted in response to major corporate accounting scandals.
2. Key provisions include enhanced financial disclosures, internal control
assessments by management and auditors, and increased criminal penalties
for fraud.
14. What is PCAOB and what do they do?
Correct Answer: Public Company Accounting Oversight Board; their role is
to ensure that auditors follow a strict set of guidelines when conducting
their audits of public companies' financial statements. They basically audit
the auditors.
Rationale:
*1. The PCAOB was created by the Sarbanes-Oxley Act.*
2. It oversees the audits of public companies to protect investors and the
public interest by ensuring informative and independent audit reports.
WGU C213 Exam Q&A| Accounting for
Decision Makers | Latest 2026/2027
100% Correct Grade A
Exam Structure:
Subject: Accounting for Decision Makers
Source: WGU C213 Exam Guide
Format: Questions & Answers with Rationales
1. The emphasis in financial accounting is on which of the following
external user groups?
A. investors and creditors
Correct Answer: investors and creditors
Rationale:
1. Financial accounting focuses on providing information to parties outside
the organization.
2. Investors and creditors are the primary external users for making decisions
about providing capital.
2. The primary internal group that uses accounting information is?
A. management
Correct Answer: management
Rationale:
1. Managerial accounting is designed for internal use.
*2. Management uses this information for planning, controlling, and
decision-making within the company.*
3. Internal reports are generally used by:
A. management
Correct Answer: management
Rationale:
1. Internal reports are not distributed externally.
, 2|Page
2. They are prepared specifically to aid managers in operational and strategic
decisions.
4. Which of the following is NOT an external user of financial
information?
A. management
Correct Answer: management
Rationale:
1. External users include investors, creditors, and regulators.
2. Management is an internal user, as they are part of the company's
operations.
5. Who is FASB?
Correct Answer: Financial Accounting Standards Board
Rationale:
*1. FASB is the primary standard-setting body for U.S. GAAP.*
*2. It is a private, not-for-profit organization.*
6. What does the FASB do?
A. sets accounting standards in the U.S.
B. Private Group (Not government)
Correct Answer: sets accounting standards in the U.S.; Private Group (Not
government)
Rationale:
1. The FASB establishes Generally Accepted Accounting Principles (GAAP) for
the United States.
2. It operates independently of the federal government.
7. What does GAAP stand for?
Correct Answer: Generally Accepted Accounting Principles
Rationale:
1. GAAP is the framework of accounting rules, standards, and procedures used
in the U.S.
2. It ensures consistency, comparability, and reliability of financial
statements.
, 3|Page
8. Which of the following is NOT true of the Financial Accounting
Standards Board (FASB)?
A. It seeks consistency for its proposed standards
B. It is a government agency
C. It has no legal power to enforce the standards it sets
D. It consists of seven full-time members
Correct Answer: It is a government agency
Rationale:
*1. The FASB is a private-sector organization.*
2. While its standards are authoritative, it does not have direct legal
enforcement power; the SEC provides legal authority for public companies.
9. Generally accepted accounting principles are:
A. Developed by accounting rule makers
Correct Answer: Developed by accounting rule makers
Rationale:
*1. GAAP is established by designated standard-setting bodies like the FASB
and the SEC.*
2. They are not laws passed by legislatures but are developed through a due
process involving accounting professionals.
10. What is the SEC? And what do they do?
Correct Answer: Securities and Exchange Commission. U.S. government
agency that is in charge of keeping an eye on corporations, and are
responsible for ensuring that investors, creditors, and other financial
statement users are provided with reliable information.
Rationale:
1. The SEC is a federal government agency.
2. Its mission is to protect investors, maintain fair markets, and facilitate
capital formation by requiring full and accurate financial disclosure.
11. Who is the AICPA?
Correct Answer: American Institute of Certified Public Accountants
Rationale:
1. The AICPA is the national professional organization for CPAs in the United
States.
2. It sets ethical and professional standards for the accounting profession.
, 4|Page
12. What does the AICPA do?
A. sets professional requirements for CPAs
B. conducts research
C. publishes materials on many different subjects related to accounting,
auditing, attestation and assurance services, management consulting
services, and taxes
Correct Answer: sets professional requirements for CPAs; conducts
research; publishes materials on many different subjects related to
accounting, auditing, attestation and assurance services, management
consulting services, and taxes
Rationale:
1. The AICPA develops the CPA exam and sets continuing professional
education requirements.
2. It issues guidance on technical accounting and auditing matters through
publications and research.
13. What is the Sarbanes-Oxley Act?
Correct Answer: An act passed into law by Congress in 2002 to establish
strict accounting and reporting rules in order to make senior managers
more accountable and to improve and maintain investor confidence.
Rationale:
1. SOX was enacted in response to major corporate accounting scandals.
2. Key provisions include enhanced financial disclosures, internal control
assessments by management and auditors, and increased criminal penalties
for fraud.
14. What is PCAOB and what do they do?
Correct Answer: Public Company Accounting Oversight Board; their role is
to ensure that auditors follow a strict set of guidelines when conducting
their audits of public companies' financial statements. They basically audit
the auditors.
Rationale:
*1. The PCAOB was created by the Sarbanes-Oxley Act.*
2. It oversees the audits of public companies to protect investors and the
public interest by ensuring informative and independent audit reports.
