COURSE CODE: WGU C213 EXAM TIME
COURSE TITLE: Accounting for Decision Makers — Comprehensive DATE ALLOWED
Final Examination —/—/ 120
INSTRUCTOR: — —— Minutes
WGU C213 — Final Examination
Accounting for Decision Makers — Financial Statements, Cost Behaviour, CVP Analysis & Managerial
Accounting
ALL QUESTIONS ARE COMPULSORY
A MULTIPLE CHOICE QUESTIONS (50 Marks)
Choose the single best answer for each question. Write the correct letter (A, B, C, or D) in the space provided.
1. In what order are assets listed on the balance sheet?
A. Alphabetical order.
B. In order of liquidity, with the most liquid assets listed first.
C. In order of value, with the highest dollar amounts listed first.
D. Long-term assets first, followed by current assets.
✦ CORRECT ANSWER: B — In order of liquidity, with the most liquid assets listed first.
Assets are listed in order of liquidity — the amount of time it would usually take to convert an asset into cash.
Cash is listed first, followed by marketable investments, accounts receivable, inventory, and then long-term
investments, fixed assets, and intangibles. Current assets are always listed before long-term assets. Current
liabilities are listed before long-term liabilities, but there is no specific ordering within those categories.
, 2. What is the primary difference between a manufacturing company and a service
company in terms of product costs?
A. A service company has selling costs while a manufacturing company does not.
B. A manufacturing company has direct materials (inventory); a service company does not.
C. A manufacturing company has administrative costs; a service company does not.
D. There is no difference between the two types of companies.
✦ CORRECT ANSWER: B — A manufacturing company has direct materials (inventory); a service
company does not.
The only difference between period costs and product costs for manufacturing versus service companies is
that manufacturing companies have direct materials (inventory). Both types of companies have selling costs
and administrative costs (period costs). For product costs, a service company has direct labour and service
overhead, while a manufacturing company has direct labour, manufacturing overhead, AND direct materials.
Product costs = Direct Labour + Direct Materials + Factory Overhead.
3. A company had sales of $110,000 in 2017, representing a 10% growth over 2016. What
were the 2016 sales?
A. $121,000
B. $99,000
C. $100,000
D. $90,000
✦ CORRECT ANSWER: C — $100,000
To calculate 2016 sales when given 2017 sales and a 10% growth rate: $110,000 ÷ 1.10 = $100,000. To forecast
future income statements, first convert the historical income statement into a common-sized income
statement (all line items as percentages of sales). Then multiply the projected sales figure by each percentage
to derive forecasted line items.
COURSE TITLE: Accounting for Decision Makers — Comprehensive DATE ALLOWED
Final Examination —/—/ 120
INSTRUCTOR: — —— Minutes
WGU C213 — Final Examination
Accounting for Decision Makers — Financial Statements, Cost Behaviour, CVP Analysis & Managerial
Accounting
ALL QUESTIONS ARE COMPULSORY
A MULTIPLE CHOICE QUESTIONS (50 Marks)
Choose the single best answer for each question. Write the correct letter (A, B, C, or D) in the space provided.
1. In what order are assets listed on the balance sheet?
A. Alphabetical order.
B. In order of liquidity, with the most liquid assets listed first.
C. In order of value, with the highest dollar amounts listed first.
D. Long-term assets first, followed by current assets.
✦ CORRECT ANSWER: B — In order of liquidity, with the most liquid assets listed first.
Assets are listed in order of liquidity — the amount of time it would usually take to convert an asset into cash.
Cash is listed first, followed by marketable investments, accounts receivable, inventory, and then long-term
investments, fixed assets, and intangibles. Current assets are always listed before long-term assets. Current
liabilities are listed before long-term liabilities, but there is no specific ordering within those categories.
, 2. What is the primary difference between a manufacturing company and a service
company in terms of product costs?
A. A service company has selling costs while a manufacturing company does not.
B. A manufacturing company has direct materials (inventory); a service company does not.
C. A manufacturing company has administrative costs; a service company does not.
D. There is no difference between the two types of companies.
✦ CORRECT ANSWER: B — A manufacturing company has direct materials (inventory); a service
company does not.
The only difference between period costs and product costs for manufacturing versus service companies is
that manufacturing companies have direct materials (inventory). Both types of companies have selling costs
and administrative costs (period costs). For product costs, a service company has direct labour and service
overhead, while a manufacturing company has direct labour, manufacturing overhead, AND direct materials.
Product costs = Direct Labour + Direct Materials + Factory Overhead.
3. A company had sales of $110,000 in 2017, representing a 10% growth over 2016. What
were the 2016 sales?
A. $121,000
B. $99,000
C. $100,000
D. $90,000
✦ CORRECT ANSWER: C — $100,000
To calculate 2016 sales when given 2017 sales and a 10% growth rate: $110,000 ÷ 1.10 = $100,000. To forecast
future income statements, first convert the historical income statement into a common-sized income
statement (all line items as percentages of sales). Then multiply the projected sales figure by each percentage
to derive forecasted line items.
