WGU C213 ACCOUNTING FOR DECISION MAKERS FINAL EXAM QUESTIONS & ANSWERS 202…
P R O F E S S I O N A L P R A C T I C E M AT E R I A L S
WGU C213 Accounting for
Decision Makers Final Exam
Questions & Answers 2026-
2027 | Latest Verified Exam
(Rationales)
Verified Answers Exam Ready With Rationales 73 QUESTIONS
DOCUMENT OVERVIEW
This document contains 73 verified questions with correct answers and detailed rationales,
covering accounting for decision making. It is suitable for exam preparation, course review,
and rapid remediation, providing students with verified content and explanations for
effective study.
TOPICS
Financial Statement Fundamentals Q1–Q22
Accounting Roles & Ethics Q23–Q41
Cost Accounting Concepts Q42–Q63
Cash Flow Statement Analysis Q64–Q69
Financial Reporting Issues Q70–Q73
Page 1
, E XA M Q U EST I O N S
Q1 QUESTION 1 OF 73
Order of assets listed on the balance sheet
CORRECT ANSWER
Assets are listed in the order of liquidity. Liquidity is the amount of time it would usually take to
covert an asset into cash. Obviously, cash would be listed first, followed by marketable
investments (a company can quickly convert a short-term investment into cash). Accounts
receivable would be listed next followed by inventory, and long-term investments, fixed assets,
and intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no specific order they are
listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance sheet; although,
typically you will see paid-in-capital followed by retained earnings followed by accumulated
other comprehensive income, and lastly, treasury stock.
RATIONALE
Assets are presented on the balance sheet in descending order of liquidity, meaning they are listed
from most easily convertible to cash to least easily convertible. This ordering prioritizes current
assets like cash and marketable securities before long-term assets such as property, plant,
equipment, and intangible assets.
Q2 QUESTION 2 OF 73
Difference between a manufacturing company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead
Manufacturing Co Selling Costs Direct Labor
Administrative Costs Manufacturing Overhead
Direct Materials (inventory
CORRECT ANSWER
The only difference is - a manufacturing company has direct materials (inventory).
Page 2
, RATIONALE
Service companies cannot have direct materials as inventory because their primary output is
intangible, unlike manufacturing companies which produce physical goods with associated
material costs. This distinction means manufacturing firms incur product costs like direct materials,
while service firms only incur period costs.
Q3 QUESTION 3 OF 73
Evaluating a historical income statement to project a future income statement.
Projected growth for 2017 = 10% increase over 2016 sales.
Step 1: Convert the income statement into a common-sized income statement.
Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the forecasted 2017 sales. Then
multiply the projected 2017 sales by the percentages from step 1.
Now, what would you do if you were given the 2017 sales figure and you need to calculate
the 2016 sales figure based off the 10% growth for 2017?
CORRECT ANSWER
Calculation for 2016: 110,.10 = 100,000
RATIONALE
To calculate the prior year's sales when given the current year's sales and a growth rate, divide the
current year's sales by (1 + growth rate). This reverses the multiplication used to forecast future
sales, isolating the base year's revenue.
Q4 QUESTION 4 OF 73
Explain Accrual Accounting
Revenue recognition:
Page 3
, CORRECT ANSWER
In order for revenue to be recognized in an accrual system, two criterial must be met:
The promised work must be done before the revenue is recognized.
Cash collection must be reasonable assured before revenue is recognized.
RATIONALE
Accrual accounting recognizes revenue when earned and realized, meaning services are rendered
and collection is probable, irrespective of immediate cash receipt. This principle ensures financial
statements reflect economic performance rather than just cash flow.
Q5 QUESTION 5 OF 73
Explain Accrual Accounting
Expense recognition:
CORRECT ANSWER
Expenses are matched to the revenue that is generated from the expense.
Direct matching, as with cost of goods sold (COGS)
However, some expenses are extremely difficult to match with specific revenue, and are more
aligned to a specific time period.
Systematic allocation, as with deprecation
Moreover, some expenses are difficult to match with specific revenue or specific time periods.
Immediate recognition, as with advertising
RATIONALE
Accrual accounting recognizes expenses by matching them to the revenue they generate (direct
matching), systematically allocating them over time (systematic allocation), or recognizing them
immediately when incurred if matching is not feasible. This principle ensures expenses are reported
in the same period as the revenues they help produce, providing a more accurate picture of
profitability.
Q6 QUESTION 6 OF 73
Describe the three financial statements.
Page 4
P R O F E S S I O N A L P R A C T I C E M AT E R I A L S
WGU C213 Accounting for
Decision Makers Final Exam
Questions & Answers 2026-
2027 | Latest Verified Exam
(Rationales)
Verified Answers Exam Ready With Rationales 73 QUESTIONS
DOCUMENT OVERVIEW
This document contains 73 verified questions with correct answers and detailed rationales,
covering accounting for decision making. It is suitable for exam preparation, course review,
and rapid remediation, providing students with verified content and explanations for
effective study.
TOPICS
Financial Statement Fundamentals Q1–Q22
Accounting Roles & Ethics Q23–Q41
Cost Accounting Concepts Q42–Q63
Cash Flow Statement Analysis Q64–Q69
Financial Reporting Issues Q70–Q73
Page 1
, E XA M Q U EST I O N S
Q1 QUESTION 1 OF 73
Order of assets listed on the balance sheet
CORRECT ANSWER
Assets are listed in the order of liquidity. Liquidity is the amount of time it would usually take to
covert an asset into cash. Obviously, cash would be listed first, followed by marketable
investments (a company can quickly convert a short-term investment into cash). Accounts
receivable would be listed next followed by inventory, and long-term investments, fixed assets,
and intangibles.
Current assets are listed before long-term assets.
Current liabilities are listed before long-term liabilities, but there is no specific order they are
listed in outside of current and long-term.
There is also no specific order equity accounts are listed on the balance sheet; although,
typically you will see paid-in-capital followed by retained earnings followed by accumulated
other comprehensive income, and lastly, treasury stock.
RATIONALE
Assets are presented on the balance sheet in descending order of liquidity, meaning they are listed
from most easily convertible to cash to least easily convertible. This ordering prioritizes current
assets like cash and marketable securities before long-term assets such as property, plant,
equipment, and intangible assets.
Q2 QUESTION 2 OF 73
Difference between a manufacturing company and a service company.
Period Costs Product Costs
Service Co. Selling Costs Direct Labor
Administrative Costs Service Overhead
Manufacturing Co Selling Costs Direct Labor
Administrative Costs Manufacturing Overhead
Direct Materials (inventory
CORRECT ANSWER
The only difference is - a manufacturing company has direct materials (inventory).
Page 2
, RATIONALE
Service companies cannot have direct materials as inventory because their primary output is
intangible, unlike manufacturing companies which produce physical goods with associated
material costs. This distinction means manufacturing firms incur product costs like direct materials,
while service firms only incur period costs.
Q3 QUESTION 3 OF 73
Evaluating a historical income statement to project a future income statement.
Projected growth for 2017 = 10% increase over 2016 sales.
Step 1: Convert the income statement into a common-sized income statement.
Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the forecasted 2017 sales. Then
multiply the projected 2017 sales by the percentages from step 1.
Now, what would you do if you were given the 2017 sales figure and you need to calculate
the 2016 sales figure based off the 10% growth for 2017?
CORRECT ANSWER
Calculation for 2016: 110,.10 = 100,000
RATIONALE
To calculate the prior year's sales when given the current year's sales and a growth rate, divide the
current year's sales by (1 + growth rate). This reverses the multiplication used to forecast future
sales, isolating the base year's revenue.
Q4 QUESTION 4 OF 73
Explain Accrual Accounting
Revenue recognition:
Page 3
, CORRECT ANSWER
In order for revenue to be recognized in an accrual system, two criterial must be met:
The promised work must be done before the revenue is recognized.
Cash collection must be reasonable assured before revenue is recognized.
RATIONALE
Accrual accounting recognizes revenue when earned and realized, meaning services are rendered
and collection is probable, irrespective of immediate cash receipt. This principle ensures financial
statements reflect economic performance rather than just cash flow.
Q5 QUESTION 5 OF 73
Explain Accrual Accounting
Expense recognition:
CORRECT ANSWER
Expenses are matched to the revenue that is generated from the expense.
Direct matching, as with cost of goods sold (COGS)
However, some expenses are extremely difficult to match with specific revenue, and are more
aligned to a specific time period.
Systematic allocation, as with deprecation
Moreover, some expenses are difficult to match with specific revenue or specific time periods.
Immediate recognition, as with advertising
RATIONALE
Accrual accounting recognizes expenses by matching them to the revenue they generate (direct
matching), systematically allocating them over time (systematic allocation), or recognizing them
immediately when incurred if matching is not feasible. This principle ensures expenses are reported
in the same period as the revenues they help produce, providing a more accurate picture of
profitability.
Q6 QUESTION 6 OF 73
Describe the three financial statements.
Page 4
