Western Governors University | C213 Accounting for Decision Makers
WGU C213 Accounting for Decision
Makers Objective Assessment
Comprehensive Examination 2026/2027
| Verified Questions
Western Governors University | C213 Accounting for Decision Makers | University-Level Business
Students
100 Verified Questions | 4 Core Domains | Academic Year 2026/2027
Prepared by
Western Governors University | C213 Accounting for Decision Makers
Objective Assessment Comprehensive Examination Actual Exam | Academic Year
2026/2027
WGU C213 Accounting for Decision Makers Objective Assessment Comprehensive Examination 2026/2027 | Verified Questions
,INTRODUCTION
This comprehensive examination contains 100 original verified questions designed for university-level
business students preparing for the WGU C213 Accounting for Decision Makers Objective Assessment.
The questions are distributed equally across four core domains: Financial Accounting Fundamentals and
the Accounting Cycle (25 questions), Managerial Accounting and Cost Behavior (25 questions),
Budgeting, Performance Evaluation, and Decision Making (25 questions), and Financial Statement
Analysis and Reporting (25 questions). Content is original and structured to reinforce official Western
Governors University C213 course objectives for actual exam readiness and professional proficiency,
aligned to the 2026/2027 academic year. Each question includes a correct answer and a rationale
grounded in foundational financial and managerial accounting methodology and current GAAP reporting
standards.
ACTUAL QUESTIONS
Domain 1: Financial Accounting Fundamentals and the Accounting Cycle
Question 1. Which of the following best describes the primary purpose of the accounting
equation?
A. To measure the profitability of a company over a period of time
B. To ensure that every economic transaction is recorded in at least two accounts
C. To express the relationship Assets = Liabilities + Equity at any point in time
D. To calculate the cash flows from operating activities
Correct Answer: C
Rationale: The accounting equation Assets = Liabilities + Equity is the foundational identity of double-
entry accounting and must remain in balance after every transaction.
Question 2. A company purchases equipment for $40,000 by paying $10,000 cash and
signing a note for the balance. What is the effect on the accounting equation?
A. Assets increase $40,000; Liabilities increase $40,000
B. Assets increase $30,000; Liabilities increase $30,000
C. Assets increase $10,000; Equity increases $10,000
D. Assets decrease $10,000; Liabilities increase $30,000
Correct Answer: B
Rationale: Equipment (asset) increases by $40,000, cash (asset) decreases by $10,000, and notes
payable (liability) increases by $30,000, resulting in a net asset increase of $30,000 matched by a
$30,000 liability increase.
Question 3. Which account is increased with a debit?
A. Service Revenue
B. Accounts Payable
C. Accumulated Depreciation
D. Accounts Receivable
Correct Answer: D
Rationale: Accounts Receivable is an asset account; assets are increased with debits under the rules of
double-entry accounting.
Question 4. The matching principle requires that:
A. Revenues be recorded when cash is received
B. Expenses be recognized in the same period as the revenues they help generate
C. Assets be recorded at historical cost
D. Liabilities be reported at present value
WGU C213 Accounting for Decision Makers Objective Assessment Comprehensive Examination 2026/2027 | Verified Questions
, Correct Answer: B
Rationale: The matching principle is a core accrual-accounting concept that pairs expenses with the
revenues they help produce in the same reporting period.
Question 5. A company receives $12,000 cash in advance for services to be performed over
the next six months. The correct initial journal entry is:
A. Debit Cash $12,000; Credit Service Revenue $12,000
B. Debit Unearned Revenue $12,000; Credit Cash $12,000
C. Debit Cash $12,000; Credit Unearned Revenue $12,000
D. Debit Accounts Receivable $12,000; Credit Service Revenue $12,000
Correct Answer: C
Rationale: Cash is received before the performance obligation is satisfied, so the credit is to a liability
(Unearned Revenue) rather than to revenue.
Question 6. Which of the following is a permanent account?
A. Depreciation Expense
B. Retained Earnings
C. Service Revenue
D. Dividends
Correct Answer: B
Rationale: Retained Earnings is a permanent (real) equity account that carries its balance forward;
temporary accounts such as revenues, expenses, and dividends are closed at period-end.
Question 7. The process of transferring information from the journal to the ledger is
called:
A. Journalizing
B. Posting
C. Closing
D. Adjusting
Correct Answer: A
Rationale: Posting is the step in the accounting cycle that moves debit and credit amounts from the
general journal into the individual accounts in the general ledger.
Question 8. An adjusting entry that records depreciation of equipment will:
A. Increase assets and increase expenses
B. Decrease assets and decrease equity through an expense
C. Increase liabilities and increase expenses
D. Have no effect on the accounting equation
Correct Answer: C
Rationale: Depreciation reduces the net book value of the asset (via Accumulated Depreciation) and
recognizes Depreciation Expense, which reduces equity.
Question 9. Which trial balance is prepared after all adjusting entries have been
journalized and posted?
A. Unadjusted trial balance
B. Adjusted trial balance
C. Post-closing trial balance
D. Worksheet trial balance
Correct Answer: A
WGU C213 Accounting for Decision Makers Objective Assessment Comprehensive Examination 2026/2027 | Verified Questions
WGU C213 Accounting for Decision
Makers Objective Assessment
Comprehensive Examination 2026/2027
| Verified Questions
Western Governors University | C213 Accounting for Decision Makers | University-Level Business
Students
100 Verified Questions | 4 Core Domains | Academic Year 2026/2027
Prepared by
Western Governors University | C213 Accounting for Decision Makers
Objective Assessment Comprehensive Examination Actual Exam | Academic Year
2026/2027
WGU C213 Accounting for Decision Makers Objective Assessment Comprehensive Examination 2026/2027 | Verified Questions
,INTRODUCTION
This comprehensive examination contains 100 original verified questions designed for university-level
business students preparing for the WGU C213 Accounting for Decision Makers Objective Assessment.
The questions are distributed equally across four core domains: Financial Accounting Fundamentals and
the Accounting Cycle (25 questions), Managerial Accounting and Cost Behavior (25 questions),
Budgeting, Performance Evaluation, and Decision Making (25 questions), and Financial Statement
Analysis and Reporting (25 questions). Content is original and structured to reinforce official Western
Governors University C213 course objectives for actual exam readiness and professional proficiency,
aligned to the 2026/2027 academic year. Each question includes a correct answer and a rationale
grounded in foundational financial and managerial accounting methodology and current GAAP reporting
standards.
ACTUAL QUESTIONS
Domain 1: Financial Accounting Fundamentals and the Accounting Cycle
Question 1. Which of the following best describes the primary purpose of the accounting
equation?
A. To measure the profitability of a company over a period of time
B. To ensure that every economic transaction is recorded in at least two accounts
C. To express the relationship Assets = Liabilities + Equity at any point in time
D. To calculate the cash flows from operating activities
Correct Answer: C
Rationale: The accounting equation Assets = Liabilities + Equity is the foundational identity of double-
entry accounting and must remain in balance after every transaction.
Question 2. A company purchases equipment for $40,000 by paying $10,000 cash and
signing a note for the balance. What is the effect on the accounting equation?
A. Assets increase $40,000; Liabilities increase $40,000
B. Assets increase $30,000; Liabilities increase $30,000
C. Assets increase $10,000; Equity increases $10,000
D. Assets decrease $10,000; Liabilities increase $30,000
Correct Answer: B
Rationale: Equipment (asset) increases by $40,000, cash (asset) decreases by $10,000, and notes
payable (liability) increases by $30,000, resulting in a net asset increase of $30,000 matched by a
$30,000 liability increase.
Question 3. Which account is increased with a debit?
A. Service Revenue
B. Accounts Payable
C. Accumulated Depreciation
D. Accounts Receivable
Correct Answer: D
Rationale: Accounts Receivable is an asset account; assets are increased with debits under the rules of
double-entry accounting.
Question 4. The matching principle requires that:
A. Revenues be recorded when cash is received
B. Expenses be recognized in the same period as the revenues they help generate
C. Assets be recorded at historical cost
D. Liabilities be reported at present value
WGU C213 Accounting for Decision Makers Objective Assessment Comprehensive Examination 2026/2027 | Verified Questions
, Correct Answer: B
Rationale: The matching principle is a core accrual-accounting concept that pairs expenses with the
revenues they help produce in the same reporting period.
Question 5. A company receives $12,000 cash in advance for services to be performed over
the next six months. The correct initial journal entry is:
A. Debit Cash $12,000; Credit Service Revenue $12,000
B. Debit Unearned Revenue $12,000; Credit Cash $12,000
C. Debit Cash $12,000; Credit Unearned Revenue $12,000
D. Debit Accounts Receivable $12,000; Credit Service Revenue $12,000
Correct Answer: C
Rationale: Cash is received before the performance obligation is satisfied, so the credit is to a liability
(Unearned Revenue) rather than to revenue.
Question 6. Which of the following is a permanent account?
A. Depreciation Expense
B. Retained Earnings
C. Service Revenue
D. Dividends
Correct Answer: B
Rationale: Retained Earnings is a permanent (real) equity account that carries its balance forward;
temporary accounts such as revenues, expenses, and dividends are closed at period-end.
Question 7. The process of transferring information from the journal to the ledger is
called:
A. Journalizing
B. Posting
C. Closing
D. Adjusting
Correct Answer: A
Rationale: Posting is the step in the accounting cycle that moves debit and credit amounts from the
general journal into the individual accounts in the general ledger.
Question 8. An adjusting entry that records depreciation of equipment will:
A. Increase assets and increase expenses
B. Decrease assets and decrease equity through an expense
C. Increase liabilities and increase expenses
D. Have no effect on the accounting equation
Correct Answer: C
Rationale: Depreciation reduces the net book value of the asset (via Accumulated Depreciation) and
recognizes Depreciation Expense, which reduces equity.
Question 9. Which trial balance is prepared after all adjusting entries have been
journalized and posted?
A. Unadjusted trial balance
B. Adjusted trial balance
C. Post-closing trial balance
D. Worksheet trial balance
Correct Answer: A
WGU C213 Accounting for Decision Makers Objective Assessment Comprehensive Examination 2026/2027 | Verified Questions
