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

WGU C213 Objective Assessment– Accounting for Decision Maker Review (Latest 2026/ 2027 Update) | 100% Verified Questions & Answers | Grade A Question: The director of a marathon race wants to assign the cost of having police officers along the race route to manage crowd control. Which consideration is an appropriate cost driver? Answer: The number of race participants and spectators. 3 multiple choice options Question: What has had the most significant impact on accounting practices? Answer: Information technology 3 multiple choice options Question: Which users would have a primary concern with an organization's ability to provide healthcare benefits? Answer: Employees 3 multiple choice options Question: What does accounting focus on? Answer: The impact a business's activities on its overall financial performance. 3 multiple choice options Question: Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? Answer: Statement of cash flows 3 multiple choice options Question: Which benefit does a corporation gain by following Generally Accepted Accounting Principles (GAAP)? Answer: An increase in its comparability to other companies. 3 multiple choice options Question: Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company? Answer: The Public Company Accounting Oversight Board (PCAOB) 3 multiple choice options Question: What two items of information are revealed on the balance sheet? Answer: Ownership and Debt 3 multiple choice options Question: Which term is defined as the residual interest in the net assets of a company? Answer: Owners' equity 3 multiple choice options Question: A corporation has a total liabilities of $300 million, total owners' equity of $100 million, and current assets of $50 million. What is the value of the firm's long-term assets? (Liabilities +Assets) Answer: $350 Million 3 multiple choice options Question: Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting? Answer: In 2014, a company provides services to a customer for which cash will be collected the next year (2015). 3 multiple choice options Question: Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company? Answer: Cash flows from financing activities 3 multiple choice options Question: Where would an investor find a summary of a company's significant accounting policies? Answer: In the notes to financial statements 3 multiple choice options Question: Reliable Answer: Information that can be verified Question: Relevant Answer: Information having to do with the matter at hand. Question: Material Answer: Information that is important enough to make a difference. Question: Conservatism Answer: Information related to recognizing losses as they occur. Question: Which assurance does an external audit report provide for its readers? Answer: The company's financial statements fairly reflect its financial position 3 multiple choice options Question: Order the steps in the decision cycle from first to last: Answer: Prepare financial statements, analyze financial statements, gather information, make decision, and implement decision 3 multiple choice options Question: Partial financial information for a company is as follows: Answer: Current assets $36,543 Total assets $58,719 Current liabilities $24,824 Total liabilities $48,561 Stockholders' equity $10,158 Sales$46,997 Net Income $3,761 Market value of shares $41,316 What is the price-earnings (PE) ratio for this company? (Hint: Market value of shares/net income) 11.0 3 multiple choice options What does it mean if a company has a debt ratio of 101.5%? Answer: The company has 1.5% more total liabilities than total assets. 3 multiple choice options 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 3 multiple choice options Which two cash flow adequacy ratios represent a cash cow? Answer: 6,991/5,486 and 5,220/1,875 3 multiple choice options Which formula yields a cash time interest earned ratio of 11? Answer: Cash before interest and taxes of $11,000/cash paid for interest of $1,000. 3 multiple choice options Which form of debt should be reported in the long-term liability category? Answer: Notes payable expected to be paid in 18 months 3 multiple choice options In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred: Answer: - January 1 The corporation received $1,000,000 in cash in exchange for stock issued to stockholders. - January 3 The corporation borrowed $250,000 from bank. The loan is a four-year loan with an interest rate of 12 percent, payable each year on January 1 beginning in year 2. - January 5 The corporation purchased equipment to be used in the business for $200,000 cash. - January 8 The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers. - January 15 The corporation hired five employees. Each employee will be paid $1,000 at the end of each month. - January 30 The corporation paid $6,000 cash for a one-year insurance policy. The policy period will begin on February 1, year 1. What will be the impact of the January 5 event on the company's balance sheet on that date? Equipment will increase 200,000 and cash will decrease 200,000 3 multiple choice options On May 1, 2011 a company using accrual accounting purchased equipment costing $500,000. It expects the equipment to have a useful life of five years. At the time of purchase. the company also purchased a one-year insurance policy on this equipment, which cost $6,000. How much insurance expense should the company have recognized for the year ending in 2011? Answer: $4,000 3 multiple choice options In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred: - January 1 The corporation received $1,000,000 in cash in exchange for stock issued to stockholders. - January 3 The corporation borrowed $250,000 from bank. The loan is a four-year loan with an interest rate of 12 percent, payable each year on January 1 beginning in year 2. - January 5 The corporation purchased equipment to be used in the business for $200,000 cash. - January 8 The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers. - January 15 The corporation hired five employees. Each employee will be paid $1,000 at the end of each month. - January 30 The corporation paid $6,000 cash for a one-year insurance policy. The policy period will begin on February 1, year 1. What will be the impact of the January 31 event on the company's balance sheet on that date? Prepaid insurance will increase 6,000 and cash will decrease 6,000 3 multiple choice options Which two values affect the measurement of net income? Operating expenses and ordinary gains and losses 3 multiple choice options Which two items' subtotals are included in a multi-step income statement? Gross profit and income from operations 3 multiple choice options A furniture company using accrual accounting purchased 20 sofas in November 2011. In December 2011, 8 of the 20 sofas were sold to customers. The customers all signed contracts agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012. At the time of sale, the company was reasonably sure the customers would pay the amount owed. The furniture company pays its salespeople a commission on each sofa sold, with commissions for December 2011 sales paid in January 2012. The furniture company paid $3,000 for advertising that ran in the local newspaper in November 2011. In which month should advertising costs be expensed? November 2011 3 multiple choice options In January of year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, it focused on obtaining the financing needed to start its operations. In February of year 1, the company sold inventory costing $25,000 for $75,000 cash. In February of year 1, the company provided technology-related services worth $10,000. Customers paid a total of $4,000 in cash for these services and promised to pay the remainder the following month. What will be the total impact of these services provided on the company's balance sheet other than an increase in cash of $4,000? Accounts receivable will increase 6,000 and retained earnings will increase 10,000. 3 multiple choice options What was the 2012 net profit amount if the 2013 pro-forma net profit of $187,000 was based on a 22% increase? (hint: 153,279 x .22 = 33,721. 153,279 + 33,721 = 187,000) 153,279 3 multiple choice options What is is a common category in a statement of cash flows? Cash from investing activities 3 multiple choice options Which cash flow category would include "cash received from investors"? Cash from financing activities 3 multiple choice options Which item is an investing activity Cash payments for purchase of plant assets 3 multiple choice options What impact does the sale of equipment have on the statement of cash flows? An increase in cash from investing activities 3 multiple choice options What is known about the direct and indirect methods of preparing statements of cash flows? The indirect method is more popular among large U.S. companies. 3 multiple choice options A company's statement of cash flows includes the following cash transactions: Sales 1,250,000 Inventory Purchase -750,000 Property and Equipment Purchase -270,000 Interest Payment on Long-Term Debt -25,000 Payment of Wages -315,000 Payment of Rent -40,000 Borrowing Long-Term Debt 200,000 Payment of Cash Dividends -15,000 Repurchase of Treasury Stock -40,000 Total Cash Flows -5,000 Assuming the company uses US GAAP standards, what is the total cash flow from financing activities? $175,000 $160,000 $145,000 $120,000 145,000. (200,000 - 15,000 - 40,000 = 145,000) Which two examples represent financial statement errors? Choose 2 answers The accounting department miscalculates the payroll tax due at year-end, resulting in an inaccurate liability. The accountant unintentionally records amounts as revenue that were prepaid by customers but not yet earned. 3 multiple choice options Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an invoice that includes more items than were actually received? The inventory department counts and inspects items as received and forwards the receiving record to accounts payable. 3 multiple choice options What are two common reasons for managers to manipulate reported earnings? Choose 2 answers They are feeling pressured to meet internal sales goals. They are preparing to qualify for a bank loan. 3 multiple choice options Which two requirements must accounting firms that audit public companies meet under the Sarbanes-Oxley Act? Choose 2 answers: Firms must not provide certain non-audit services to audit clients, such as management functions or legal services. Firms must report to and be retained by the audit committee rather than the CFO or other company management 3 multiple choice options Which two requirements must management of public companies meet under the Sarbanes-Oxley Act? Choose 2 answers: They must provide an assessment of the effectiveness of internal controls with each annual report. They must support a stronger board and audit committee. 3 multiple choice options Which two actions do internal auditors perform to assist in maintaining the integrity of financial statements? Choose 2 answers: They search for and investigate fraud. They review financial records and internal controls. 3 multiple choice options What is a significant role of the U.S. Securities and Exchange Commission (SEC) in financial reporting? They ensure that financial statement users are provided with reliable information to use in decision making. 3 multiple choice options What does management accounting provide? Choose 2 The insight that management needs so the business can perform more effectively. The detailed data that managers need to make decisions that will give the business a competitive edge 3 multiple choice options How does management accounting differ from financial accounting? Management accounting is used primarily for internal planning, control, and evaluation. 3 multiple choice options Which account is seen on the balance sheet of a manufacturing company but not on the balance sheet of a service-oriented company? Inventory 3 multiple choice options What is a cost that will change in the future based upon the decision made? Differential cost 3 multiple choice options Which two examples are period costs? Administrative expenses. Selling expenses 3 multiple choice options A company manufactures custom-built wooden bookshelves. Which two costs would the company classify as period costs? Salary cost of the receptionist. Advertising cost 3 multiple choice options What role do ethical standards have in management accounting? To guide the resolution to possible ethical dilemmas that the managerial accountant may encounter. 3 multiple choice options The director of a marathon race wants to assign the cost of having police officers along the race route to manage crowd control. Which consideration is an appropriate cost driver? The number of race participants and spectators. 3 multiple choice options During its first month of operations, a manufacturer incurs the following costs in dollars related to activities within its factory: Direct materials costs $5,000 Indirect materials $2,000 Direct labor $15,000 Indirect labor $3,000 Factory rent $10,000 Depreciation on factory equipment $8,000. What are the manufacturer's total product costs for the month? 43,000 During its first month of operations, a manufacturer incurs the following costs (in dollars) related to activities within its factory: Direct materials $15,000 Direct labor $30,000 Manufacturing overhead $40,000 What amount should be reported as cost of goods sold on the income statement if 5,000 units are produced and 4,000 are sold? $68,000 What are the 5 steps in Activity - Based Costing (ABC)? Identify overhead cost activities, Analyze individual overhead costs in terms of cost activities, Identify measurable cost drivers, Assign overhead, and use the ABC data to make decisions. 3 multiple choice options Remember, ABC relates only to what? Overhead costs 3 multiple choice options Normal wear-and-tear on machines, electricity, routine cleanup, routine maintenance, and regular accounting are examples of what? Overhead What is Unit-Level overhead? Routine overhead. Maintenance, depreciation, and electricity. What is batch level overhead? There is overhead cost with starting and stopping the making of one product and the starting of another product. What is product line overhead? Servicing the needs of each individual product on the line, such as the receiving dock. What is facility support overhead? The overhead costs for just keeping the factory open. In which scenario would activity-based costing be more appropriate than traditional costing? A company produces five different products. The products are highly differentiated and have significantly different demands for their use of overhead costs. 3 multiple choice options Which category of ABC activities are machine setup and material movement costs associated with? Batch-level activities 3 multiple choice options A manufacturer produces three products: A, B, and C. The company uses the following information to determine activity rates for each pool: Cost Pool Pool 1 $300,000 20,000 hours Pool 2 $20,000 500 pounds Pool 3 $10,000 100 moves Total $330,000 Data concerning the three products appear below: Cost DriverProducts Product A 10,000 Hours 150 Pounds 20 Moves Product B 7,500 Hours 250 Pounds 30 Moves Product C 2,500 Hours 100 Pounds 50 Moves What is the total amount of overhead applied to product A? 158,000 A running shoe manufacturer produces three types of shoes: traditional, minimalist, and spikes. The company uses the following information to determine activity rates for each pool: Cost Pool Shoe production: $250,000. 20,000 pairs of shoes Shoe Batches: $10,000. 500 Batches Shoe Design: $5,000. 100 Parts Total: $265,000 Cost Driver Traditional 10,000 Pairs 150 batches 20 Parts Minimalist 7,500 pairs 250 batches 30 parts Spikes 2,500 pairs 100 batches 50 parts What is the total amount of overhead applied to spikes shoes? 35,750 Given the following information: Pairs of shoes expected to be produced 1,950,000 Pairs of shoes produced 2,500,000 Overhead rate $0.75 What is the amount of applied overhead? $412,500 $550,000 $1,462,500 $1,875,000 1,875,000. (2,500,000 x 0.75) Company A calculated the following information under traditional and activity-based costing for the production and sale of 1,000 units of Product B: Sales T: $100,000 ABC: $100,000 Cost of goods sold T: $70,000 ABC: $110,000 Gross margin T: $30,000 ABC: ($10,000) Which decision should be made about the selling price of Product B? The price of product B should be increased 3 multiple choice options A company reported the following information for the production and sale of 500,000 gallons of oil: Sales: 1,500,000 Production Costs: - Direct Materials: $575,000 - Direct Labor $300,000 Applied overhead using ABC - Overhead on gallons $375,000 - Overhead on batches $100,000 - Overhead on ingredients $180,000 Total Production Cost: $1,530,000 Gross Profit ($30,000) $0.75 per gallon $500 per batch $1,000 per ingredient What would be the gross profit if the company increased their selling price per gallon by $0.10? 20,000. (0.75 + 0.10= 0.85. 500,000 x 0.85= 425,000. 425,000 - 375,000 = 50,000. 375,000 - 50,000 = 325,000. Add production costs to get gross profit of 20,000) Which two concepts are studied in cost-volume-profit analysis? Profits and Levels of activity 3 multiple choice options What are two impacts on costs as sales volume increases? Choose 2 Total fixed costs will stay the same. Fixed costs per unit will decrease 3 multiple choice options A company manufactures and sells widgets. The following information is available: • Each widget sells for $100. • The variable cost per widget is $50. • Total fixed costs per month are $300,000. How many widgets does the company need to sell each month to break even? 6,000 4,500 3,000 2,000 6,000. (6,000 x 100 = 600,000. 6,000 x 50 = 300,000. 600,000 - 300,000 = 300,000. 300,000 - 300,000 = 0) A company is experiencing an increase in their bad debt expense. Which change in credit policy would cause this increase? Credit limits were increased for all customers. 3 multiple choice options Which two costs are included when calculating inventory costs? Direct Labor and Overhead 3 multiple choice options A company has projected the following sales for the spring quarter of 2014: April $200,000 May $250,000 June $275,000 65% of all sales are paid for with cash. The remainder is on credit. The pattern for credit receivables collections are: Month of Sale 60% Month After Sale 30% Second Month After Sale 10% What are the forecasted cash collections for the month of June? 269,750 A company budgeted the following purchases for raw materials: - Jan 10,000 - Feb 20,000 - Mar 25,000 - Apr 22,000 - May 27,000 - Jun 30,000 - Jul 24,000 The company has a policy of paying for 40% of the purchases in the month of purchase, 35% in the month following the purchase, and 25% in the second month following the purchase. Based on this information, what are the budgeted cash disbursements for May? -18,500 -24,750 -25,050 -27,300 24,750 A company plans to purchase inventory for the second half of 2014 as follows: Jul 100,000 Aug 75000 Sep 225000 Oct 125000 Nov 250000 Dec 30000 They usually pay 50% of inventory purchases in the month of purchase, 35% in the following month, and 15% in the second month. Based on this information, what are the forecasted total 2014 cash payments for inventory purchased in the second half of 2014? - 752,500 Good management accounting is motivated by: Management's desire to improve 3 multiple choice options Providing information for planning, controlling and evaluating is a function of: Management accounting 3 multiple choice options The first step in management planning is: Defining the problem 3 multiple choice options The process of control involves: Preparing capital budgets 3 multiple choice options Which of the following is a short-run planning decision? Preparing operational budgets 3 multiple choice options The process of control involves: Tracking actual results 3 multiple choice options The control of operations involves all the following procedures EXCEPT: Analyzing results 3 multiple choice options Businesses use accounting systems to All of the above are correct. 3 multiple choice options Which of the following is NOT a function of accounting? Executing sales transactions for organizations. 3 multiple choice options Which of the following is NOT typically true of financial accounting information? The information relates to future time periods. 3 multiple choice options Which of the following financial statements reports the amount of cash collected and paid out by a company? Statement of cash flows. 3 multiple choice options Which of the following is NOT one of the three primary financial statements? Statement of retained earnings. 3 multiple choice options Which of the following financial statements reports a company's resources, obligations, and ownership? Balance sheet. 3 multiple choice options Which of the following financial statements reports the excess of a company's revenues over its expenses? Income statement. 3 multiple choice options Which of the following is NOT an external user of accounting information? Management. 3 multiple choice options The emphasis in financial accounting is to provide financial information to which of the following user groups? Investors and creditors. 3 multiple choice options The current standard setting organization for financial accounting in the United States is the Financial Accounting Standards Board (FASB). 3 multiple choice options Which of the following is NOT true about the Financial Accounting Standards Board (FASB)? It is a government agency. 3 multiple choice options Which of the following organizations has specific legal authority to establish financial accounting standards for publicly held U.S. companies? Security and Exchange Commission (SEC). 3 multiple choice options Increased federal oversight of the audit process resulted from the passage of the following act of Congress: Sarbanes-Oxley Act. 3 multiple choice options Which of the following types of accounts are NOT found on the balance sheet? Revenues. 3 multiple choice options The basic accounting equation is Assets = Liabilities + Owner's Equity 3 multiple choice options Which of the following accounts is the most liquid? Cash 3 multiple choice options Which of the following distinguishes between current and long-term assets? Classified balance sheet 3 multiple choice options Cooper Company purchased land for $90,000 in 2010. In 2013, the land is valued at $155,000. The land would appear on the company's December 31, 2013 balance sheet at $90,000. 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 year, is called a(n) Income Statement. 3 multiple choice options Which of the following statements is TRUE regarding the Statement of Cash Flows prepared using the Direct Method? A Statement of Cash Flows prepared under the Direct Method is typically easier for users to understand than a Statement of Cash Flows prepared under the Indirect Method. 3 multiple choice options Which of the following is an overall measure of the economic performance of a business entity's activities? Net income (or net loss) 3 multiple choice options Which of the following would be included on an income statement? Cost of goods sold 3 multiple choice options Expense and revenue accounts appear on the Income statement. 3 multiple choice options In completing an audit of a company's financial statements, external 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 is an asset? Accounts receivable 3 multiple choice options Which of the following would be classified as a long-term asset? Land 3 multiple choice options Which of the following would be classified as a current asset? Accounts receivable 3 multiple choice options Which of the following is considered a liability? Interest payable 3 multiple choice options Which of the following would be classified as a current liability? Accounts payable 3 multiple choice options Which of the following would be classified as a noncurrent liability? Portion of mortgage payable not due within the next 12 months 3 multiple choice options Which of the following is NOT considered to be an owners' equity account? Gain 3 multiple choice options Given the following information, compute operating income. Cost of goods sold $2,000 Income taxes 350 Interest expense 200 Operating expenses 1,500 Sales 5,500 $2,000 3 multiple choice options Given the following information, compute net income. Cost of goods sold $2,000 Income taxes 350 Interest expense 200 Operating expenses 1,500 Sales 5,500 $1,450 3 multiple choice options Given the following information, compute gross profit. Cost of goods sold $2,000 Income taxes 350 Interest expense 200 Operating expenses 1,500 Sales 5,500 $3,500 3 multiple choice options 1. The following information was taken from the records of Thompson Corporation for the year ended December 31, 2013: Dividends paid $ 12,800 Service revenue 90,500 Accounts payable 139,750 Capital stock 378,750 Total expenses 67,000 Retained earnings (at 1/1/2013) 43,400 The net income at December 31, 2013 was $23,500 3 multiple choice options Which of the following is a revenue generating activity? Service is provided. 3 multiple choice options 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 A wholesale bakery would normally recognize revenue when goods are delivered to the customer. 3 multiple choice options Which of the following is NOT an acceptable basis for the recognition of expenses? Cash disbursement. 3 multiple choice options Which of the following is NOT a reason for problems occurring in the financial statements? Internal controls 3 multiple choice options Which of the following does Sarbanes-Oxley NOT require management to do? Approve all loans to executive officers and directors. 3 multiple choice options Which of the following activities would internal auditors NOT typically perform in a large company? Prepare the financial statements. 3 multiple choice options All of the following are likely to be methods that could be used to conduct fraud EXCEPT Overstating liabilities. 3 multiple choice options Which of the following is NOT an objective of the accounting system? Make sure a company only records profitable transactions. 3 multiple choice options Which of the following is an example of an adequate segregation of duties? Greg is in charge of recording receipt of payments made to accounts receivable, while Susan is in charge of making deposits to the bank. 3 multiple choice options Which of the following is an example of a physical control over assets and records? Every evening, Shellie makes a back-up file of all transactions recorded on the computer that day, burns the back-up file onto a CD, and then locks the CD into a fire-proof vault. 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 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 reviews the estimates that he has made and adjusts some accounting numbers to meet the requirements for his bonus. This is an example of Meeting internal targets. 3 multiple choice options As William is preparing the end of year financial statements, he realizes that the earnings are not quite up to par for the large loan application that is being currently processed. He decides to stretch the assumptions just enough to be able to meet the requirements for the loan application. This is an example of Meeting external expectations. 3 multiple choice options According to Sarbanes-Oxley, which of the following services are external auditors permitted to provide to its audit client? Opinions about the reliability of internal controls. 3 multiple choice options According to Sarbanes-Oxley, who are the external auditors required to report to and be retained by? Audit Committee. 3 multiple choice options The Public Company Accounting Oversight Board (PCAOB) is NOT required to Enforce compliance with the Foreign Corrupt Practices Act. 3 multiple choice options The Sarbanes-Oxley Act establishes All of the above are correct. 3 multiple choice options The internal audit manager reports directly to Audit Committee. 3 multiple choice options A company is experiencing a decrease in their bad debt expense. What change in credit policy would cause this decrease? Credit terms 2/10, n/30 were granted on all credit sales. 3 multiple choice options Financing Activities (long term liabilities and equity on balance sheet) Stock issuance Borrowing Cash Receipts from stockholders payments from Cash dividends Repayment of loans (payment on mortgage) Repurchase of stock (treasury stock) Investing Activities (Long-term assets on balance sheet) Cash receipts from sale of plant assets (vehicle) sale of a business segment Purchase or sale of PPE(building, vehicle) Buys and sells stock Lender (loaning money)