WGU C213 PA & OA Study Guide 2025–
2026 – Verified Questions, Correct
Answers & Full Exam Prep (Graded A+)
The impact a business's activities have on its overall financial performance - Answer-
What does accounting focus on?
Statement of cash flows - Answer-Which report summarizes cash collections and cash
expenditures from operating, investing, and financing activities over a period of time?
Employees - Answer-Which users would have a primary concern with an organization's
ability to provide healthcare benefits?
An increase in its compatibility to other companies - Answer-Which benefit does a
corporation gain by following Generally Accepted Accounting Principles (GAPP)?
The Public Company Accounting Oversight Board (PACOB) - Answer-Which body
regulates a certified public accounting firm's audit practices when the firm is auditing a
large publicly traded company?
Information technology - Answer-What has had the most significant impact on
Accounting practices?
Ownership and Debt - Answer-What two items of information are revealed on the
balance sheet?
Owners equity - Answer-Which term is defined as the residual in the net assets of a
company?
In 2014, a company provides services to a customer for which cash will be collected the
next year (2015). - Answer-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?
Cash from financing activities - Answer-Which category on the statement of cash flows
summarizes cash receipts and payments to owners and creditors of the company?
,In the notes to financial statements - Answer-Where would an investor find a summary
of a company's significant accounting policies?
The company's financial statements fairly reflect its financial position - Answer-Which
assurance does an external audit report provide for its readers?
Which consideration is an appropriate cost driver?
The price of Product B should be increased. - Answer-Company A calculated the
following information under traditional and activity-based costing for the production and
sale of 1,000 units of Product B:
Traditional ABC
Sales $100,000 $100,000
Cost of goods sold $70,000 $110,000
Gross margin $30,000 ($10,000)
Which decision should be made about the selling price of Product B?
Profits
Cash - Answer-Which two concepts are studied in cost-volume-profit analysis?
Total fixed costs will stay the same.
Fixed costs per unit will decrease. - Answer-What are two impacts on costs as sales
volume increases?
Credit limits were increased for all customers - Answer-A company is experiencing an
increase in their bad debt expense.
Which change in credit policy would cause this increase?
Overstates owner's equity - Answer-If a company does NOT record accrued wages
expense at the end of the year, how does this affect the year-end financial statements?
Overstates assets - Answer-Failure to record the used portion of supplies on hand
during the month has the following effect on the financial statements prepared at the
end of the month
Safeguards - Answer-Which of the following is NOT a reason for problems occurring in
the financial statements?
Failure to record depreciation expense - Answer-Which one of the following errors
causes net income to be overstated?
Understatement of total assets and total liabilities - Answer-Recording the payment of
an accounts payable twice will result in?
, Earnings management - Answer-Which of the following is NOT one of the major
safeguards in the financial reporting process?
Make sure a company only records profitable transactions - Answer-Which of the
following is NOT an objective of the accounting system?
Describe in detail the internal controls of the company - Answer-The Sarbanes-Oxley
act requires that an internal control report be included in every company's annual report.
Which one of the following is NOT one of the requirements of the internal control report?
The Securities and Exchange Commissions regulations are followed - Answer-Which of
the following is NOT one of the major concerns of most company's have when they are
designing internal controls?
Auditing system - Answer-Which of the following is NOT one of the five basic categories
of internal control?
Timing transactions so that large one-time gains and losses occur in the same quarter. -
Answer-Earnings management through strategic matching is exemplified by
Changing the useful life of a depreciable asset and fully disclosing it in the notes -
Answer-Earnings management through aggressive accounting is best exemplified by
Recording expenses as assets - Answer-Which of the following typically involves the
use of non-GAAP accounting?
Changing the interest rate used in accounting for leases without describing the change
in the notes to financial statements. - Answer-Earnings management through deceptive
accounting is best exemplified by
Make loans to executive officers and directors - Answer-Which of the following does
Sarbanes-Oxley NOT require management to do?
Audit committee - Answer-According to Sarbanes-Oxley who are auditors required to
report to and be retained by?
Conducts inspections of accounting firms - Answer-The public accounting oversight
board
Opinions about the reliability of internal controls - Answer-According to Sarbanes-Oxley,
which one of the following services is an accounting firm permitted to provide to its audit
client?
Enforce compliance with the Foreign Corrupt Practices Act - Answer-The public
accounting oversight board is NOT required to
2026 – Verified Questions, Correct
Answers & Full Exam Prep (Graded A+)
The impact a business's activities have on its overall financial performance - Answer-
What does accounting focus on?
Statement of cash flows - Answer-Which report summarizes cash collections and cash
expenditures from operating, investing, and financing activities over a period of time?
Employees - Answer-Which users would have a primary concern with an organization's
ability to provide healthcare benefits?
An increase in its compatibility to other companies - Answer-Which benefit does a
corporation gain by following Generally Accepted Accounting Principles (GAPP)?
The Public Company Accounting Oversight Board (PACOB) - Answer-Which body
regulates a certified public accounting firm's audit practices when the firm is auditing a
large publicly traded company?
Information technology - Answer-What has had the most significant impact on
Accounting practices?
Ownership and Debt - Answer-What two items of information are revealed on the
balance sheet?
Owners equity - Answer-Which term is defined as the residual in the net assets of a
company?
In 2014, a company provides services to a customer for which cash will be collected the
next year (2015). - Answer-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?
Cash from financing activities - Answer-Which category on the statement of cash flows
summarizes cash receipts and payments to owners and creditors of the company?
,In the notes to financial statements - Answer-Where would an investor find a summary
of a company's significant accounting policies?
The company's financial statements fairly reflect its financial position - Answer-Which
assurance does an external audit report provide for its readers?
Which consideration is an appropriate cost driver?
The price of Product B should be increased. - Answer-Company A calculated the
following information under traditional and activity-based costing for the production and
sale of 1,000 units of Product B:
Traditional ABC
Sales $100,000 $100,000
Cost of goods sold $70,000 $110,000
Gross margin $30,000 ($10,000)
Which decision should be made about the selling price of Product B?
Profits
Cash - Answer-Which two concepts are studied in cost-volume-profit analysis?
Total fixed costs will stay the same.
Fixed costs per unit will decrease. - Answer-What are two impacts on costs as sales
volume increases?
Credit limits were increased for all customers - Answer-A company is experiencing an
increase in their bad debt expense.
Which change in credit policy would cause this increase?
Overstates owner's equity - Answer-If a company does NOT record accrued wages
expense at the end of the year, how does this affect the year-end financial statements?
Overstates assets - Answer-Failure to record the used portion of supplies on hand
during the month has the following effect on the financial statements prepared at the
end of the month
Safeguards - Answer-Which of the following is NOT a reason for problems occurring in
the financial statements?
Failure to record depreciation expense - Answer-Which one of the following errors
causes net income to be overstated?
Understatement of total assets and total liabilities - Answer-Recording the payment of
an accounts payable twice will result in?
, Earnings management - Answer-Which of the following is NOT one of the major
safeguards in the financial reporting process?
Make sure a company only records profitable transactions - Answer-Which of the
following is NOT an objective of the accounting system?
Describe in detail the internal controls of the company - Answer-The Sarbanes-Oxley
act requires that an internal control report be included in every company's annual report.
Which one of the following is NOT one of the requirements of the internal control report?
The Securities and Exchange Commissions regulations are followed - Answer-Which of
the following is NOT one of the major concerns of most company's have when they are
designing internal controls?
Auditing system - Answer-Which of the following is NOT one of the five basic categories
of internal control?
Timing transactions so that large one-time gains and losses occur in the same quarter. -
Answer-Earnings management through strategic matching is exemplified by
Changing the useful life of a depreciable asset and fully disclosing it in the notes -
Answer-Earnings management through aggressive accounting is best exemplified by
Recording expenses as assets - Answer-Which of the following typically involves the
use of non-GAAP accounting?
Changing the interest rate used in accounting for leases without describing the change
in the notes to financial statements. - Answer-Earnings management through deceptive
accounting is best exemplified by
Make loans to executive officers and directors - Answer-Which of the following does
Sarbanes-Oxley NOT require management to do?
Audit committee - Answer-According to Sarbanes-Oxley who are auditors required to
report to and be retained by?
Conducts inspections of accounting firms - Answer-The public accounting oversight
board
Opinions about the reliability of internal controls - Answer-According to Sarbanes-Oxley,
which one of the following services is an accounting firm permitted to provide to its audit
client?
Enforce compliance with the Foreign Corrupt Practices Act - Answer-The public
accounting oversight board is NOT required to
