WGU C213 Objective Assessment V2 – Accounting for Decision Maker Review (Latest 2026/ 2027 Update) | 100% Verified Questions & Answers | Grade A

WGU C213 Objective Assessment V2 – Accounting for Decision Maker Review (Latest 2026/ 2027 Update) | 100% Verified Questions & Answers | Grade A Question: The ability a company has to pay its debts in the short run is its Answer Liquidity 3 multiple choice options Question: Which of the following is a measure of the liquid position of a corporation? Answer Debt ratio 3 multiple choice options Question: Which of the following ratios is used to measure a firm's leverage? Answer Debt Ratio 3 multiple choice options Question: Which of the following ratios is used to measure the profit earned on each dollar invested in a firm? Answer Return on Equity 2 multiple choice options Question: The emphasis in financial accounting is on which of the following external user groups? Answer Investors and creditors 2 multiple choice options Question: The primary internal group that uses accounting information is Answer Management 2 multiple choice options Question: Internal reports are generally used by Answer Management 3 multiple choice options Question: Which of the following is NOT an external user of financial information? Answer Management 3 multiple choice options Question: Which of the following is NOT true of the Financial Accounting Standards Board (FASB)? Answer It is a government agency Question: Generally accepted accounting principles are Answer Developed by accounting rule makers 2 multiple choice options Question: The initials GAAP stand for Answer Generally Accepted Accounting Principles 2 multiple choice options Question: The current standard-setting board for accounting in the private sector is the Answer Financial Accounting Standards Board (FASB) 2 multiple choice options Question: The organization that develops worldwide accounting standards is the Answer International Accounting Standards Board (IASB) 2 multiple choice options Question: The initials CPA stand for Answer Certified Public Accountant 2 multiple choice options Question: Which of the following is NOT a service typically provided by large public accounting firms? Answer Making management decisions 3 multiple choice options Question: Standards established by the International Accounting Standards Board are referred to as Answer International Financial Reporting Standards 3 multiple choice options Question: Which of the following is the government agency that stipulates the rules and regulations that govern the collection of taxes in the United States? Answer Internal Revenue Service 3 multiple choice options Question: Which of the following is NOT a reason for the integration of worldwide accounting standards? Answer the theoretical necessity of a common set of accounting standards 3 multiple choice options Question: The International Accounting Standards Board (IASB) is charged with developing worldwide accounting practices? Answer True 1 multiple choice option Question: With the current state of information technology, investors outside a company are now allowed access to a company's internal database of financial information and do their own customized analysis of a firm's performance. Answer False 1 multiple choice option Question: Increased federal oversight of the audit process resulted from the passage of the following act of Congress - Answer Sarbanes-Oxley Act 3 multiple choice options Question: A borrower benefits from providing financial information regarding income and expenses in the form of a lower interest rate on the loan because of reduced uncertainty for the lender with regard to repayment. Answer True 1 multiple choice option Question: Which of the following is NOT one of the three primary financial statements? Answer The Statement of Retained Earnings 3 multiple choice options Question: One reason for a company's preparing and providing financial statements is to reduce uncertainty for an investor regarding the firm's future financial performance. Answer True 1 multiple choice option Which of the following accounts is considered to be the most liquid? Answer Cash 3 multiple choice options Which of the following types of accounts are NOT found on the balance sheet? Answer Revenues 3 multiple choice options The financial statement that reports resources owned, the obligations to transfer resources to other organizations, and the claims by the entity's owners is known as the Answer Balance sheet 3 multiple choice options The idea that the activities of the entity are to be separated from those of the individual owner is the Separate entity concept 3 multiple choice options The basic accounting equation is Assets = Liabilities + Owners' Equity 3 multiple choice options Which of the following would be included on an income statement? Rent expense 3 multiple choice options Costs that are incurred during the normal operations of a business to generate revenues are called Expenses 1 multiple choice option Another name for the income statement is Statement of earnings 3 multiple choice options Revenues cause An increase in net assets 3 multiple choice options The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or a year, is called a(n) Income Statement 3 multiple choice options Which of the following activities would NOT be classified as an investing activity? Purchase of inventory 3 multiple choice options A major source of cash from operating activities is Receipts from sale of goods 3 multiple choice options Which of the following classifications refers to those activities associated with buying and selling long-term assets? Investing 3 multiple choice options Which of the following classifications does NOT appear on the Statement of Cash Flows? Borrowing 3 multiple choice options Vital information that CANNOT be captured solely by dollar amounts is reported in a firm's Notes to financial statements 3 multiple choice options Which of the following is NOT one of the four general types of financial statement notes? Supplementary information required by the Internal Revenue Service 3 multiple choice options Which of the following is an example of a significant accounting policy that would be explained in the notes to the financial statements? The method used to estimate depreciation on a piece of equipment 3 multiple choice options Which of the following is an example of a disclosure of information NOT recognized that would be explained in the notes to the financial statements? The disclosure of the uncertain, potential outcome of a lawsuit 3 multiple choice options Which of the following is an example of additional information about summary totals that would be explained in the notes to the financial statements? The description of all the individual items that comprise notes payable 3 multiple choice options An independent audit report is usually issued by A certified public accountant 3 multiple choice options In completing an audit of a company's financial statements, auditors Provide some assurance that the financial statements are not misleading 3 multiple choice options The accuracy of the information contained in the financial statements is the responsibility of the Management 3 multiple choice options Which of the following are the two economic factors that enable us to trust an independent auditor despite the fact that the auditor was hired by the company being audited? Reputation of auditor and risk of lawsuits 3 multiple choice options The idea that certain figures on an operating statement help to explain changes in figures on comparative balance sheets is referred to as Articulation 3 multiple choice options The idea that information becomes more useful when it can be related to a benchmark or a standard is referred to as Comparability 3 multiple choice options The notion that when doubt exists concerning two or more reporting alternatives, users should select the alternative with the least favorable impact on reported income, assets, and liabilities is referred to as Conservatism 3 multiple choice options Whether an item is big enough that proper accounting will make a difference to users of accounting information is referred to as Materiality 3 multiple choice options The notion that information will be more useful if it will impact a decision is referred to as Relevance 3 multiple choice options If a corporation has total assets of $350,000, total liabilities of $150,000, and retained earnings of $100,000, what is the amount of capital stock? $100,000 3 multiple choice options Which of the following is generally considered to be an asset? Accounts receivable 3 multiple choice options Which of the following generally is NOT considered to be a liability? Inventory 3 multiple choice options Which of the following decreases owners' equity? Operations generate a loss 3 multiple choice options The total amount invested to acquire an ownership interest in a corporation is called Common Stock and Preferred Stock 3 multiple choice options Current assets usually are listed on a balance sheet in Decreasing order of liquidity 3 multiple choice options Which of the following accounts would NOT be considered a current asset? Equipment 3 multiple choice options In non-U.S. Balance sheets, you will often see each of the following EXCEPT: The stockholders’ equity section will be listed first on the balance sheet 2 multiple choice options This is sometimes done in place of recognition when the effects of an event cannot be quantified with any degree of certainty. Disclosure 3 multiple choice options The process of determining the dollar value to assign to an item that is to be recognized in the financial statements is called Valuation 3 multiple choice options Historical cost has long been used in accounting because it is Reliable 3 multiple choice options The process of formally recording an item in the accounting records so that it will be reflected in the financial statements is called Recognition 3 multiple choice options Reporting the details of a transaction in the notes to the financial statements is called Disclosure 3 multiple choice options When an investor pays cash into a business to become a part owner, the effect on the accounting equation for the business will be to Increase Cash and increase Paid-in Capital 3 multiple choice options When a company buys a warehouse by using a mortgage with a local bank, the effect on the accounting equation for the company will be to Increase Buildings and increase Mortgage Payable 3 multiple choice options When a company borrows money from a bank to be repaid in over time, the effect on the accounting equation for the company will be to Increase Cash and increase Bank Loan Payable 3 multiple choice options When a company purchases equipment on credit, the effect on the accounting equation will be to increase Equipment and increase a liability 3 multiple choice options When a company rents a warehouse by paying for the first six month's rent in advance, the effect on the accounting equation on the day of payment would be to Increase Prepaid Rent and decrease Cash 3 multiple choice options A company's asset mix is determined by Dividing each asset item on the balance sheet by total assets 3 multiple choice options A company's asset mix is strongly influence by The company’s industry 3 multiple choice options Financing mix is a measure of The degree to which a company finances assets using liabilities or owners’ equity 3 multiple choice options The number used to reflect an overall measure of the change in a company's wealth during the period is - Comprehensive Income 3 multiple choice options A measure of a company's performance that is intended to summarize in one number the overall economic performance of a company in a given period is - Net Income 3 multiple choice options A measure of a company's performance that includes all items that are expected to continue into the future is - Income from Continuing Operations 3 multiple choice options Earnings per share is equal to Net income divided by total number of shares of stock outstanding 3 multiple choice options With a single-step income statement all revenues are grouped together, all expenses are grouped together, and net income is computed as the difference between the two. True 1 multiple choice option When revenue and expense items are arranged to highlight important profit relationships, the resulting income statement format is called a - multiple-step income statement 3 multiple choice options With a multiple-step income statement all revenues are grouped together, all expenses are grouped together, and net income is computed as the difference between the two. False 1 multiple choice option Under the general rule of revenue recognition, revenue is recognized when the earnings process is complete, and a valid promise of payment has been received. 3 multiple choice options Which of the following is NOT an acceptable basis for the recognition of expenses? Cash disbursement 1 multiple choice option Which of the following principles best describes the rationale for matching administrative and selling expenses with revenues of the current period? Immediate recognition 3 multiple choice options Costs that can be reasonably associated with specific revenues but NOT with specific products should be expensed in the period in which the related revenue is recognized. 3 multiple choice options A wholesale bakery would normally recognize revenue when goods are delivered to the customer. 3 multiple choice options Analysis of revenue and expense transactions requires the use of the: Expanded Accounting Equation 3 multiple choice options Thus far, the only national government to adopt the accrual basis for its official accounting system is ______. New Zealand 3 multiple choice options Which of the following statements is true regarding retained earnings? All of the statements are true 3 multiple choice options ______ is/are not considered to be an expense of doing business. Cash dividends 3 multiple choice options ____ is increased and ____ is decreased when cash is collected from customers who had previously purchased a product or service on account. Cash, Accounts Receivable 3 multiple choice options Most forecasting exercises begin with a forecast of sales. 3 multiple choice options If a company anticipates a 40% increase in sales volume, then it is most likely that the company will need about a 40% increase in accounts payable. 3 multiple choice options The statement of cash flows Summarizes all cash inflows and outflows of an entity for a given period of time 3 multiple choice options The statement of cash flows replaces the None of these 3 multiple choice options Which of the following is NOT a purpose of the statement of cash flows? It measures the profitability of an entity. 3 multiple choice options Which of the following statements is NOT true? The statement of cash flows includes transactions that are not already reflected in the balance sheet and income statement. 3 multiple choice options Which of the following would be reported as a cash flow from financing activities? Cash receipts from the issuance of long-term debt 3 multiple choice options Which of the following would be reported as a financing activity on a statement of cash flows? Purchase of treasury stock 3 multiple choice options Which of the following would NOT be included in the operating activities section of the statement of cash flows? Dividends paid 3 multiple choice options Significant noncash financing transactions Should not be disclosed in the body of a statement of cash flows but should appear in the notes to the financial statements elsewhere 3 multiple choice options Which of the following would NOT be reported as an investing activity on a statement of cash flows? Amounts borrowed 3 multiple choice options Which of the following would be subtracted from net income on a statement of cash flows prepared by the indirect method? An decrease in wages payable 3 multiple choice options A loss from the sale of a building would be reported on an indirect method statement of cash flows as An addition to net income 3 multiple choice options Which of the following would be deducted from net income on a statement of cash flows prepared using the indirect method? A gain from the sale of equipment 3 multiple choice options External users of financial statements use financial statement analysis for Investing decisions 3 multiple choice options When analyzing financial statements, prognosis is The prediction of how a business will perform in the future 3 multiple choice options Relationships between financial statement amounts are called Financial ratios 3 multiple choice options Which of the following statements best describes financial statement analysis? Financial statement analysis involves relationships and trends. 3 multiple choice options When analyzing financial statements, diagnosis is The identification of where a business has problems 3 multiple choice options A useful tool in financial statement analysis is the common-size financial statement. What does this tool enable the financial analyst to do? Compare the mix of revenue, and expenses, and determine efficient use of resources within a company over time or between companies within a given industry without respect to relative size. 3 multiple choice options Which of the following below generally is the most useful in analyzing companies of different sizes? Common-sized financial statements 3 multiple choice options In a common-size balance sheet, using the percent of sales method, each item on the balance sheet is typically expressed as a percentage of Sales revenue 3 multiple choice options In a common-size income statement, each item on the statement is expressed as a percentage of Revenue 3 multiple choice options The ratio that indicates if a borrowing company will be able to meet its required interest payments is the Times interest earned ratio 3 multiple choice options Which cash flow ratio reflects a company's ability to make its interest payments from cash generated through operations? Cash times interest earned 3 multiple choice options In general, most companies have significant noncash expenses that reduce net income and also cause the cash flow-to-net income ratio to be Greater than 1 1 multiple choice option The cash flow adequacy ratio is computed as Cash from operations ÷ Cash for investing activities 3 multiple choice options The particular analytical measures chosen to analyze a company may be influenced by all BUT which one of the following? Product quality or service effectiveness 3 multiple choice options Which one of these is NOT one of the benchmarking problems that arises when analyzing financial statements? All of these are benchmarking problems 3 multiple choice options A company has a credit policy of net 10 and is considering changing it to net 30 to be more in line with industry standards. What is a benefit to changing the credit policy? Attracting more customers 3 multiple choice options Burke Corporation had accounts receivable of $44,400 on April 1 and $33,600 on April 30. How much cash was collected from accounts receivable during April if Burke's April sales on account totaled $134,400? $145,200 3 multiple choice options For 2011, Raster Graphics forecasts cash receipts of $405,000 and cash disbursements of $430,000. If the beginning cash balance is $35,000 and the desired ending balance is $21,000, how much must Raster borrow during the year? $11,000 3 multiple choice options Which of the following statements is true about errors in the financial statements of a company? Errors are not intentional and when detected are immediately corrected. 3 multiple choice options Which one of the following errors causes net income to be understated? Failure to record revenue earned but not billed 3 multiple choice options Which of the following is NOT a reason for problems occurring in the financial statements? Safeguards 3 multiple choice options 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 Overstates assets 3 multiple choice options If the total amount for Rent Expense is inadvertently posted to Prepaid Rent at the end of the year, what will be the effect on the year-end financial statements? Assets will be overstated 3 multiple choice options Which of the following statements is true about errors in the financial statements of a company? Errors are not intentional and when detected are immediately corrected. 3 multiple choice options Which one of the following errors causes net income to be understated? Failure to record revenue earned but not billed 3 multiple choice options Which of the following is NOT a reason for problems occurring in the financial statements? Safeguards 3 multiple choice options 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 Overstate assets 3 multiple choice options If the total amount for Rent Expense is inadvertently posted to Prepaid Rent at the end of the year, what will be the effect on the year-end financial statements? Assets will be overstated 3 multiple choice options Which of the following is a characteristic of a well-designed document? All of these are characteristic of a well-designed document. 3 multiple choice options Control activities can be defined as The policies and procedures used by management to meet their objectives. 3 multiple choice options The internal control structure of a company is a system of policies and procedures established to All of these are correct 3 multiple choice options Which of the following groups of control activities are considered preventative controls? Segregation of duties, proper procedures for authorizations, and physical control over assets and records 3 multiple choice options Internal controls are designed to help and protect all of the following groups of people, EXCEPT Tax collectors 3 multiple choice options Fraud is Both the deceptive concealment of transactions and the creation of fictitious transactions 3 multiple choice options As William is preparing the end of year financial statements, he notices that the numbers required for his personal bonus have not been met. He begins to review the estimates that he has made in order to possibly adjust some numbers to meet the requirements for his bonus. This is an example of Meeting internal targets 3 multiple choice options Which of the following typically involves the use of non-GAAP accounting? Recording expenses as assets 3 multiple choice options Earnings management through aggressive accounting is best exemplified by Changing the useful life of a depreciable asset and fully disclosing it in the notes. 3 multiple choice options Most companies that engage in earnings management typically do NOT go beyond which of the following activities on the earnings management continuum? Strategic matching 3 multiple choice options Which of the following does Sarbanes-Oxley NOT require management to do? Make loans to executive officers and directors 3 multiple choice options The Public Company Accounting Oversight Board is NOT required to Enforce compliance with the Foreign Corrupt Practices Act 3 multiple choice options According to Sarbanes-Oxley, which one of the following services is an accounting firm permitted to provide to its audit client? Opinions about the reliability of internal controls 3 multiple choice options According to Sarbanes-Oxley, who are auditors required to report to and be retained by? Audit committee 3 multiple choice options The Public Company Accounting Oversight Board Conducts inspections of accounting firms 3 multiple choice options Which of the following audit processes attempts to identify areas that may deserve attention by using techniques such as comparative ratio analysis? Analytical procedures 3 multiple choice options Which of the following activities would internal auditors NOT typically perform in a large company? Prepare the primary financial statements 3 multiple choice options Which of the following requires CPAs to provide reasonable assurance that significant fraud or misstatement is NOT present in financial statements? Generally Accepted Auditing Standards 3 multiple choice options Which statement best describes the role of external auditors when auditing a large public company? Examine the organization's accounting for a sample of business transactions to guarantee that the financial statements are presented fairly 3 multiple choice options Which of the following is an incentive that influences auditors to remain independent and to provide fair and reliable financial information? All of these are correct. 3 multiple choice options When does the Securities and Exchange Commission (SEC) typically require a company to submit a registration statement to the SEC for approval? When the company issues new debt or stock securities to the public 3 multiple choice options What is the detailed report that companies file annually with the Securities and Exchange Commission? Form 10-K 3 multiple choice options Which form must be filed quarterly by all publicly held corporations? 10-Q 3 multiple choice options Which of the following is NOT one of the effects that the Securities Exchange Act of 1934 had on accountants? Accountants must audit all 10-Q reports. 3 multiple choice options Good management accounting is motivated by: Management's desire to improve 3 multiple choice options Strategic planning is: Broad, long-range planning. 3 multiple choice options Which of the following principles are the LEAST uniform and are NOT mandatory? Management accounting principles 3 multiple choice options Which of the following is NOT a function of management? Regulating 3 multiple choice options Capital budgeting is: The systematic planning for long-term investments in operating assets. 3 multiple choice options Which is usually conducted by executive level management? Strategic planning 3 multiple choice options In a manufacturing company, indirect labor is usually classified as a(n): Product cost 3 multiple choice options Which of the following would NOT usually be considered a product cost of a manufacturing company? Advertising 3 multiple choice options Costs that are specifically traceable to a unit of business are known as which of the following costs to that unit? Direct 3 multiple choice options You want to go skiing for the day. The cost of the lift ticket would be considered a(n): Out-of-pocket cost 3 multiple choice options You want to go skiing for the day. However, you realize you are scheduled to work. If you call in sick and do not go to work, the wages you will not earn (assuming you are an hourly employee) are considered a(n): Opportunity cost 3 multiple choice options The cost of milk used to manufacture ice cream would most likely be classified as a(n): Variable cost 3 multiple choice options The top accountant in most large organizations is usually called the: Controller 3 multiple choice options Which one of the following is NOT an ethical guideline that the Institute of Management Accountants (IMA) requires its members to follow? All of these are correct 3 multiple choice options What is the first step a business professional should take when confronted with a situation that may involve an ethical conflict? Discuss the problem with the immediate supervisor. 3 multiple choice options Which method for allocating manufacturing overhead costs is usually more accurate? Activity-based costing 3 multiple choice options Usually activity-based costing would be significantly more accurate than traditional product costing in a: Multiple-product firm where products are quite different 3 multiple choice options Which of the following types of costing systems identifies business activities that create overhead costs and then assigns overhead to products or divisions according to these activities? Activity-based costing 3 multiple choice options Activity-based costing deals with the allocation of: Manufacturing overhead costs 3 multiple choice options Activity-based costing systems assume that: Activities consume overhead costs 3 multiple choice options If activity-based costing is used, receiving docks would be classified as a: Product line activity 3 multiple choice options If activity-based costing is used, security guard wages would be classified as a: Facility support activity 3 multiple choice options Which of the following activities would most likely NOT be considered a batch activity: Storage in warehouse 3 multiple choice options For greater accuracy when using activity-based costing, management accountants should: Have a reasonable number of cost pools 3 multiple choice options An activity that affects a particular cost is a(n): Cost driver 3 multiple choice options If a cost activity does NOT have any production-related cost driver that matches up with changes in the amount of overhead cost associated with the activity then: No cost driver should be selected; the costs should be treated as common costs 3 multiple choice options A more accurate allocation of manufacturing overhead and product costing can take place when costs are assigned on the basis of: Cost drivers 3 multiple choice options Which of the following is an example of a cost driver? Machine setups 3 multiple choice options The traditional overhead cost allocation system assumes a simple relationship between overall overhead cost and A single measure of activity 3 multiple choice options Which of the following products usually consumes the highest amount of overhead costs per unit? Low-volume unique products 3 multiple choice options Which of the following items is NOT a key factor involved in cost-volume-profit (C-V-P) analysis? Time value of money 3 multiple choice options C-V-P analysis is useful to managers in: All of these are correct 3 multiple choice options C-V-P analysis, while useful for several purposes, is primarily useful in: Planning 3 multiple choice options The two components of a mixed cost are: Variable costs and fixed costs 3 multiple choice options Which of the following costs would LEAST likely be a fixed cost? Utilities expense 3 multiple choice options Which of the following types of costs always change in total in proportion to changes in the level of activity of a firm? Variable costs 3 multiple choice options As activity level increases within the relevant range, per-unit fixed costs usually will: Decrease 3 multiple choice options As activity level increases within the relevant range, total variable costs usually will: Increase 3 multiple choice options Which of the following is a common method of analyzing mixed costs? Both high-low and scattergraph 3 multiple choice options What are the total costs for a company with per-unit variable costs of $12 and total fixed costs of $51,000 if it sells 8,000 units of product? $147,000 3 multiple choice options If fixed costs are $40,000 and total costs are $200,000 at an activity level of 8,000 units, variable costs are approximately: $20 per unit 3 multiple choice options When using the scattergraph method to analyze mixed costs, the regression line should be visually fit to: Minimize the average distance between all the data points and the regression line 3 multiple choice options The per-unit contribution margin is equal to: Selling price per unit − Variable costs per unit 3 multiple choice options Given the equation $500X = $300X + $200,000, per-unit contribution margin is: $200 3 multiple choice options When other factors remain constant, an increase in variable costs: Increases the number of units needed to earn profits 3 multiple choice options Inner Corporation sells space heaters. The contribution margin is $5.40 per heater. If fixed costs are $540,000, what would be the total number of heaters sold at the break-even point? 100,000 3 multiple choice options To maximize its profits, a company should pay the highest sales commissions on those products with the: Highest contribution margin 3 multiple choice options Block Company sells three products, each with a different per-unit contribution margin.To compute Block Company's break-even point in units, it is necessary to know: All of these are needed to compute break-even point 3 multiple choice options Maintaining low fixed costs and high variable costs rather than high fixed costs and low variable costs: Is a more conservative cost structure 3 multiple choice options Operating leverage deals primarily with the relationship between: Fixed costs and variable costs 3 multiple choice options As compared to a company with a low operating leverage, a company with a high operating leverage will: Have larger losses below the break-even point 3 multiple choice options Operating leverage is: A measure of risk 3 multiple choice options