2026/2027 WGU C213 PA & OA Study Guide Exam comprehensive
questions | FREQUENTLY MOST TESTED QUESTIONS AND
VERIFIED SOLUTIONS
What does accounting focus on? - CORRECT ANSWER-The impact a
business's activities have on its overall financial performance
Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time? -
CORRECT ANSWER-Statement of cash flows
Which users would have a primary concern with an organization's
ability to provide healthcare benefits? - CORRECT ANSWER-
Employees
Which benefit does a corporation gain by following Generally Accepted
Accounting Principles (GAPP)? - CORRECT ANSWER-An increase in
its compatibility to other companies
Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company? - CORRECT
ANSWER-The Public Company Accounting Oversight Board (PACOB)
,What has had the most significant impact on Accounting practices? -
CORRECT ANSWER-Information technology
What two items of information are revealed on the balance sheet? -
CORRECT ANSWER-Ownership and Debt
Which term is defined as the residual in the net assets of a company? -
CORRECT ANSWER-Owners equity
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? - CORRECT ANSWER-In 2014, a company provides
services to a customer for which cash will be collected the next year
(2015).
Which category on the statement of cash flows summarizes cash
receipts and payments to owners and creditors of the company? -
CORRECT ANSWER-Cash from financing activities
Where would an investor find a summary of a company's significant
accounting policies? - CORRECT ANSWER-In the notes to financial
statements
,Which assurance does an external audit report provide for its readers?
- CORRECT ANSWER-The company's financial statements fairly
reflect its financial position
Information that can be verified - CORRECT ANSWER-Reliable
Information having to do with the matter at hand - CORRECT
ANSWER-Relevant
Information that is important enough to make a difference - CORRECT
ANSWER-Material
Information related to recognizing losses as they occur - CORRECT
ANSWER-Conservatism
What is consistent with a continual decline in gross profit if the firm's
cost of goods sold remains the same? - CORRECT ANSWER-
Continual decrease in sales
Which form of debt should be reported in the long-term liability
category? - CORRECT ANSWER-Notes payable expected to be paid
in 18 months
, Which values affect the measurement of net income? - CORRECT
ANSWER-Operating expenses &
Ordinary gains and losses
Which items' subtotals are included in a multi-step income statement? -
CORRECT ANSWER-Gross profit &
Income from operations
What is a common category in a statement of cash flows? - CORRECT
ANSWER-Cash from investing activities
Which cash flow category would include "cash received from
investors"? - CORRECT ANSWER-Cash from financing activities
Which item is an investing activity? - CORRECT ANSWER-Cash
payments for purchase of plant assets
What impact does the sale of equipment have on the statement of cash
flows? - CORRECT ANSWER-Increase in cash from investing activities
What is known about the direct and indirect methods of preparing
statements of cash flow? - CORRECT ANSWER-The indirect method
is more popular among large U.S. companies
questions | FREQUENTLY MOST TESTED QUESTIONS AND
VERIFIED SOLUTIONS
What does accounting focus on? - CORRECT ANSWER-The impact a
business's activities have on its overall financial performance
Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time? -
CORRECT ANSWER-Statement of cash flows
Which users would have a primary concern with an organization's
ability to provide healthcare benefits? - CORRECT ANSWER-
Employees
Which benefit does a corporation gain by following Generally Accepted
Accounting Principles (GAPP)? - CORRECT ANSWER-An increase in
its compatibility to other companies
Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company? - CORRECT
ANSWER-The Public Company Accounting Oversight Board (PACOB)
,What has had the most significant impact on Accounting practices? -
CORRECT ANSWER-Information technology
What two items of information are revealed on the balance sheet? -
CORRECT ANSWER-Ownership and Debt
Which term is defined as the residual in the net assets of a company? -
CORRECT ANSWER-Owners equity
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? - CORRECT ANSWER-In 2014, a company provides
services to a customer for which cash will be collected the next year
(2015).
Which category on the statement of cash flows summarizes cash
receipts and payments to owners and creditors of the company? -
CORRECT ANSWER-Cash from financing activities
Where would an investor find a summary of a company's significant
accounting policies? - CORRECT ANSWER-In the notes to financial
statements
,Which assurance does an external audit report provide for its readers?
- CORRECT ANSWER-The company's financial statements fairly
reflect its financial position
Information that can be verified - CORRECT ANSWER-Reliable
Information having to do with the matter at hand - CORRECT
ANSWER-Relevant
Information that is important enough to make a difference - CORRECT
ANSWER-Material
Information related to recognizing losses as they occur - CORRECT
ANSWER-Conservatism
What is consistent with a continual decline in gross profit if the firm's
cost of goods sold remains the same? - CORRECT ANSWER-
Continual decrease in sales
Which form of debt should be reported in the long-term liability
category? - CORRECT ANSWER-Notes payable expected to be paid
in 18 months
, Which values affect the measurement of net income? - CORRECT
ANSWER-Operating expenses &
Ordinary gains and losses
Which items' subtotals are included in a multi-step income statement? -
CORRECT ANSWER-Gross profit &
Income from operations
What is a common category in a statement of cash flows? - CORRECT
ANSWER-Cash from investing activities
Which cash flow category would include "cash received from
investors"? - CORRECT ANSWER-Cash from financing activities
Which item is an investing activity? - CORRECT ANSWER-Cash
payments for purchase of plant assets
What impact does the sale of equipment have on the statement of cash
flows? - CORRECT ANSWER-Increase in cash from investing activities
What is known about the direct and indirect methods of preparing
statements of cash flow? - CORRECT ANSWER-The indirect method
is more popular among large U.S. companies
