WGU C213 FINAL EXAM: ACCOUNTING FOR DECISION MAKERS
QUESTIONS AND ANSWERS (2025/2026) VERIFIED
• What does accounting focus on(answer) The impact a business's activities
have on its overall financial performance
• Which report summarizes cash collections and cash expenditures
from operating, investing, and financing activities over a period of
time(answer) State- ment of cash flows
• Which users would have a primary concern with an organization's ability
to provide healthcare benefits(answer) Employees
• Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company(answer) The
Public Com- pany Accounting Oversight Board (PCAOB)
• What has had the most significant impact on accounting
practices(answer) Infor- mation technology
• What two items of information are revealed on the balance sheet?
Choose 2 answers: Ownership.
Debt
• Which term is defined as the residual interest in the net assets of a
company(answer) Owners' equity
• A corporation has total liabilities of $300 million, total owners' equity of
$100 million, and current assets of $50 million.
,What is the value of the firm's long-term assets(answer) $350 million
• Which situation should result in revenue recognition on the income state-
ment for the year ending 12/31/14 if the firm is using accrual-basis account-
ing(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 financial statements
• Which assurance does an external audit report provide for its readers?-
: The company's financial statements fairly reflect its financial position
• Reliable: Information that can be verified
, • Relevant: Information having to do with the matter at hand
• Material: Information that is important enough to make a difference
• Conservatism: Information related to recognizing losses as they occur
• steps in the decision cycle: 1 Prepare financial statements.
2 Analyze financial statements.
3 Gather information.
4 Make decision.
5 Implement decision
• Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
What is the price-earnings (PE) ratio for this company(answer) 11.0
• 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 two cash flow adequacy ratios represent a cash cow(answer) -
$6,991/$5,486. $5,220/$1,875.
• Which formula yields a cash times 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
catego- ry(answer) Notes payable expected to be paid in 18 months
QUESTIONS AND ANSWERS (2025/2026) VERIFIED
• What does accounting focus on(answer) The impact a business's activities
have on its overall financial performance
• Which report summarizes cash collections and cash expenditures
from operating, investing, and financing activities over a period of
time(answer) State- ment of cash flows
• Which users would have a primary concern with an organization's ability
to provide healthcare benefits(answer) Employees
• Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company(answer) The
Public Com- pany Accounting Oversight Board (PCAOB)
• What has had the most significant impact on accounting
practices(answer) Infor- mation technology
• What two items of information are revealed on the balance sheet?
Choose 2 answers: Ownership.
Debt
• Which term is defined as the residual interest in the net assets of a
company(answer) Owners' equity
• A corporation has total liabilities of $300 million, total owners' equity of
$100 million, and current assets of $50 million.
,What is the value of the firm's long-term assets(answer) $350 million
• Which situation should result in revenue recognition on the income state-
ment for the year ending 12/31/14 if the firm is using accrual-basis account-
ing(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 financial statements
• Which assurance does an external audit report provide for its readers?-
: The company's financial statements fairly reflect its financial position
• Reliable: Information that can be verified
, • Relevant: Information having to do with the matter at hand
• Material: Information that is important enough to make a difference
• Conservatism: Information related to recognizing losses as they occur
• steps in the decision cycle: 1 Prepare financial statements.
2 Analyze financial statements.
3 Gather information.
4 Make decision.
5 Implement decision
• Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
What is the price-earnings (PE) ratio for this company(answer) 11.0
• 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 two cash flow adequacy ratios represent a cash cow(answer) -
$6,991/$5,486. $5,220/$1,875.
• Which formula yields a cash times 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
catego- ry(answer) Notes payable expected to be paid in 18 months
