WGU C213 Accounting for
Decision Makers – 100
Practice Questions with
Answers & Rationales
(2026/2027 Update)
Comprehensive 100-question practice exam for WGU C213 (Accounting for Decision Makers)
Objective Assessment. Covers financial vs managerial accounting, GAAP and regulatory bodies
(FASB, SEC, IASB, PCAOB, SOX), the accounting equation, financial statements (balance sheet,
income statement, retained earnings, cash flows), accrual accounting and adjusting entries,
transaction analysis, and key ratio analysis (liquidity, solvency, profitability, EPS, P/E). Includes
managerial accounting basics: cost behavior (fixed, variable, mixed), contribution margin, CVP
and break-even analysis, margin of safety, and budgeting (sales, production, cash budgets,
variance analysis). Each question includes four options, correct answer, and detailed rationale
to help you prepare confidently for the C213 OA.
Q1–Q20: Accounting Fundamentals, Users, and the Regulatory Environment
Q1. Accounting is best described as a system that:
A. Tracks only cash transactions
B. Provides quantitative financial information to support economic decision-making*
C. Focuses only on tax compliance
D. Replaces management judgment
Rationale: Accounting informs investing, lending, and operating decisions.
Q2. Which of the following is an external user of accounting information?
A. Production supervisor
B. Potential investor*
,C. Department manager
D. Internal auditor
Rationale: Investors rely on financial statements for decisions.
Q3. Financial accounting primarily serves:
A. Internal planning and control
B. External users such as investors and creditors*
C. Only tax authorities
D. Only internal management
Rationale: Financial accounting produces general-purpose external reports.
Q4. Managerial accounting primarily serves:
A. External regulators
B. Internal managers for planning, control, and decision-making*
C. Only shareholders
D. Only creditors
Rationale: Managerial accounting supports internal decisions.
Q5. The primary standard-setting body for U.S. GAAP is the:
A. SEC
B. FASB (Financial Accounting Standards Board)*
C. IRS
D. PCAOB
Rationale: FASB establishes U.S. GAAP.
, Q6. The SEC’s primary role in financial reporting is to:
A. Set GAAP standards
B. Regulate public companies and enforce reporting requirements*
C. Audit financial statements
D. Prepare tax returns
Rationale: SEC oversees public company disclosures.
Q7. International accounting standards (IFRS) are issued by the:
A. FASB
B. IASB (International Accounting Standards Board)*
C. AICPA
D. PCAOB
Rationale: IASB sets IFRS.
Q8. The primary purpose of an external audit is to:
A. Guarantee future performance
B. Provide an independent opinion on whether financial statements are fairly
presented*
C. Prepare the financial statements
D. Ensure no fraud exists
Rationale: Audits provide reasonable assurance, not guarantees.
Decision Makers – 100
Practice Questions with
Answers & Rationales
(2026/2027 Update)
Comprehensive 100-question practice exam for WGU C213 (Accounting for Decision Makers)
Objective Assessment. Covers financial vs managerial accounting, GAAP and regulatory bodies
(FASB, SEC, IASB, PCAOB, SOX), the accounting equation, financial statements (balance sheet,
income statement, retained earnings, cash flows), accrual accounting and adjusting entries,
transaction analysis, and key ratio analysis (liquidity, solvency, profitability, EPS, P/E). Includes
managerial accounting basics: cost behavior (fixed, variable, mixed), contribution margin, CVP
and break-even analysis, margin of safety, and budgeting (sales, production, cash budgets,
variance analysis). Each question includes four options, correct answer, and detailed rationale
to help you prepare confidently for the C213 OA.
Q1–Q20: Accounting Fundamentals, Users, and the Regulatory Environment
Q1. Accounting is best described as a system that:
A. Tracks only cash transactions
B. Provides quantitative financial information to support economic decision-making*
C. Focuses only on tax compliance
D. Replaces management judgment
Rationale: Accounting informs investing, lending, and operating decisions.
Q2. Which of the following is an external user of accounting information?
A. Production supervisor
B. Potential investor*
,C. Department manager
D. Internal auditor
Rationale: Investors rely on financial statements for decisions.
Q3. Financial accounting primarily serves:
A. Internal planning and control
B. External users such as investors and creditors*
C. Only tax authorities
D. Only internal management
Rationale: Financial accounting produces general-purpose external reports.
Q4. Managerial accounting primarily serves:
A. External regulators
B. Internal managers for planning, control, and decision-making*
C. Only shareholders
D. Only creditors
Rationale: Managerial accounting supports internal decisions.
Q5. The primary standard-setting body for U.S. GAAP is the:
A. SEC
B. FASB (Financial Accounting Standards Board)*
C. IRS
D. PCAOB
Rationale: FASB establishes U.S. GAAP.
, Q6. The SEC’s primary role in financial reporting is to:
A. Set GAAP standards
B. Regulate public companies and enforce reporting requirements*
C. Audit financial statements
D. Prepare tax returns
Rationale: SEC oversees public company disclosures.
Q7. International accounting standards (IFRS) are issued by the:
A. FASB
B. IASB (International Accounting Standards Board)*
C. AICPA
D. PCAOB
Rationale: IASB sets IFRS.
Q8. The primary purpose of an external audit is to:
A. Guarantee future performance
B. Provide an independent opinion on whether financial statements are fairly
presented*
C. Prepare the financial statements
D. Ensure no fraud exists
Rationale: Audits provide reasonable assurance, not guarantees.
