Page 1 of 77
PA & OA Exam Study Guide - C213 / C 213 (Latest
2025) : Accounting for Decision Makers - W.G.U
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.....Statement of cash flows
Which users would have a primary concern with an
organization's ability to provide healthcare benefits?
.....ANSWER.....Employees
Which benefit does a corporation gain by following Generally
Accepted Accounting Principles (GAPP)? .....ANSWER.....An
increase in its compatibility to other companies
Which body regulates a certified public accounting firm's audit
practices when the firm is auditing a large publicly traded
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company? .....ANSWER.....The Public Company Accounting
Oversight Board (PACOB)
What has had the most significant impact on Accounting
practices? .....ANSWER.....Information technology
What two items of information are revealed on the balance
sheet? .....ANSWER.....Ownership and Debt
Which term is defined as the residual in the net assets of a
company? .....ANSWER.....Owners equity
Which situation should result in revenue recognition on the income
statement for the year ending 12/31/14 if the firm is using
accrual 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 from financing activities
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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? .....ANSWER.....The company's financial statements fairly
reflect its financial position
Information that can be verified .....ANSWER.....Reliable
Information having to do with the matter at hand
.....ANSWER.....Relevant
Information that is important enough to make a difference
.....ANSWER.....Material
Information related to recognizing losses as they occur
.....ANSWER.....Conservatism
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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 form of debt should be reported in the long-term liability
category? .....ANSWER.....Notes payable expected to be paid in
18 months
Which values affect the measurement of net income?
.....ANSWER.....Operating expenses &
Ordinary gains and losses
Which items' subtotals are included in a multi-step income
statement? .....ANSWER.....Gross profit &
Income from operations
What is a common category in a statement of cash flows?
.....ANSWER.....Cash from investing activities
PA & OA Exam Study Guide - C213 / C 213 (Latest
2025) : Accounting for Decision Makers - W.G.U
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.....Statement of cash flows
Which users would have a primary concern with an
organization's ability to provide healthcare benefits?
.....ANSWER.....Employees
Which benefit does a corporation gain by following Generally
Accepted Accounting Principles (GAPP)? .....ANSWER.....An
increase in its compatibility to other companies
Which body regulates a certified public accounting firm's audit
practices when the firm is auditing a large publicly traded
,Page 2 of 77
company? .....ANSWER.....The Public Company Accounting
Oversight Board (PACOB)
What has had the most significant impact on Accounting
practices? .....ANSWER.....Information technology
What two items of information are revealed on the balance
sheet? .....ANSWER.....Ownership and Debt
Which term is defined as the residual in the net assets of a
company? .....ANSWER.....Owners equity
Which situation should result in revenue recognition on the income
statement for the year ending 12/31/14 if the firm is using
accrual 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 from financing activities
,Page 3 of 77
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? .....ANSWER.....The company's financial statements fairly
reflect its financial position
Information that can be verified .....ANSWER.....Reliable
Information having to do with the matter at hand
.....ANSWER.....Relevant
Information that is important enough to make a difference
.....ANSWER.....Material
Information related to recognizing losses as they occur
.....ANSWER.....Conservatism
, Page 4 of 77
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 form of debt should be reported in the long-term liability
category? .....ANSWER.....Notes payable expected to be paid in
18 months
Which values affect the measurement of net income?
.....ANSWER.....Operating expenses &
Ordinary gains and losses
Which items' subtotals are included in a multi-step income
statement? .....ANSWER.....Gross profit &
Income from operations
What is a common category in a statement of cash flows?
.....ANSWER.....Cash from investing activities
