WGU C213
ACCOUNTING FOR DECISION MAKERS
FINAL EXAM
Actual Questions and Answers
100% Guarantee Pass
This Exam contains:
➢ C213 final exam consist a series of questions,
problems, and case studies designed to test
your knowledge and application of accounting
principles,
➢ Expert-Verified explanation
,### 1. Which of the following is NOT a service typically provided by large
public accounting firms?
A) Auditing financial statements
B) Tax preparation and consulting
C) Making management decisions
D) Advising on internal controls
Correct Answer: C) Making management decisions
Rationale: Large public accounting firms provide external independent
services such as auditing, tax advice, and consulting. However, making
management decisions would compromise their objectivity and
independence, which is why it is not a service they provide.
### 2.
Kimball Co. estimated inventory purchases:
- January: $100,000
- February: $120,000
- March: $150,000
Payment pattern for purchases:
- 40% paid in month of purchase
- 50% paid in month following purchase
- 10% paid in second month following purchase
Forecast cash payments for inventory in March:
,A) $120,000
B) $130,000
C) $135,000
D) $140,000
Correct Answer: B) $130,000
Rationale:
Payments in March include:
- 10% January purchases: 0.10 × 100,000 = $10,000
- 50% February purchases: 0.50 × 120,000 = $60,000
- 40% March purchases: 0.40 × 150,000 = $60,000
Total = 10,000 + 60,000 + 60,000 = $130,000
This tests understanding of staggered payment schedules and cash
budgeting.
---
### 3. Which of the following is the government agency that stipulates the
rules and regulations governing the collection of taxes in the United States?
A) Securities and Exchange Commission (SEC)
B) Internal Revenue Service (IRS)
C) Financial Accounting Standards Board (FASB)
D) Government Accountability Office (GAO)
Correct Answer: B) Internal Revenue Service (IRS)
,Rationale: The IRS administers and enforces U.S. tax laws, regulating the
collection of federal taxes. Other agencies like the SEC regulate securities
but do not govern taxation.
---
### 4. Which of the following organizations has specific legal authority to
establish accounting standards for publicly held companies?
A) Financial Accounting Standards Board (FASB)
B) Securities and Exchange Commission (SEC)
C) International Accounting Standards Board (IASB)
D) American Institute of Certified Public Accountants (AICPA)
Correct Answer: B) Securities and Exchange Commission (SEC)
Rationale: The SEC is a government agency with legal authority to
oversee and enforce accounting regulations for publicly traded companies
in the U.S. Although FASB develops accounting principles, its standards
require SEC endorsement for legal enforcement.
---
### 5. Standards established by the International Accounting Standards
Board are referred to as:
A) Generally Accepted Accounting Principles (GAAP)
B) International Financial Reporting Standards (IFRS)
C) Public Company Accounting Oversight Board (PCAOB)
D) Statement of Financial Accounting Standards (SFAS)
,Correct Answer: B) International Financial Reporting Standards (IFRS)
Rationale: The IASB issues IFRS, a set of high-quality, globally accepted
accounting standards aimed at improving comparability of financial
statements worldwide.
---
### 6. The International Accounting Standards Board (IASB) is charged
with developing worldwide accounting practices:
A) True
B) False
Correct Answer: A) True
Rationale: IASB’s mission is to develop a common set of accounting
standards globally, promoting consistency and transparency across
international borders.
---
### 7. Which of the following is NOT a reason for the integration of
worldwide accounting standards?
A) Facilitate cross-border investment and capital flows
B) Improve comparability of financial information across countries
C) The theoretical necessity of a common set of accounting standards
D) Reduce costs associated with financial reporting and auditing
,Correct Answer: C) The theoretical necessity of a common set of
accounting standards
Rationale: The integration is driven largely by practical benefits such as
investment facilitation, comparability, and cost reduction. A “theoretical
necessity” is a weak justification compared to tangible business
advantages.
---
### 8. 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 the firm’s
performance:
A) True
B) False
Correct Answer: B) False
Rationale: Investors rely on published financial statements and disclosures
rather than direct access to companies’ internal databases to protect
confidentiality and proprietary information.
---
### 9. The Sarbanes-Oxley Act:
A) Reduced auditing requirements for publicly traded companies
B) Increased federal oversight of the audit process
C) Eliminated the need for external audits
,D) Applies only to private companies
Correct Answer: B) Increased federal oversight of the audit process
Rationale: Sarbanes-Oxley Act was enacted to strengthen corporate
governance and enhance auditor independence, increasing federal
oversight following corporate fraud scandals.
---
### 10. 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:
A) True
B) False
Correct Answer: A) True
Rationale: Transparency reduces information asymmetry, making lenders
more confident in the borrower's ability to repay and thus potentially
lowering interest cost.
---
### 11. Which of the following is NOT one of the three primary financial
statements?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
, D) Statement of Retained Earnings
Correct Answer: D) Statement of Retained Earnings
Rationale: The three primary financial statements are the Balance Sheet,
Income Statement, and Statement of Cash Flows. The Statement of
Retained Earnings is supplementary, reconciling equity changes.
### 12. One reason for a company preparing and providing financial
statements is to:
A) Increase sales volume
B) Reduce uncertainty for an investor regarding the firm’s future financial
performance
C) Decrease expenses
D) Avoid taxation
Correct Answer: B) Reduce uncertainty for an investor regarding the firm’s
future financial performance
Rationale: Financial statements provide investors with verified information
about the company’s financial status, helping reduce uncertainty in
investing decisions.
---
### 13. The idea that businesses must be accounted for as though they will
exist at least for the foreseeable future is called the:
A) Matching concept
ACCOUNTING FOR DECISION MAKERS
FINAL EXAM
Actual Questions and Answers
100% Guarantee Pass
This Exam contains:
➢ C213 final exam consist a series of questions,
problems, and case studies designed to test
your knowledge and application of accounting
principles,
➢ Expert-Verified explanation
,### 1. Which of the following is NOT a service typically provided by large
public accounting firms?
A) Auditing financial statements
B) Tax preparation and consulting
C) Making management decisions
D) Advising on internal controls
Correct Answer: C) Making management decisions
Rationale: Large public accounting firms provide external independent
services such as auditing, tax advice, and consulting. However, making
management decisions would compromise their objectivity and
independence, which is why it is not a service they provide.
### 2.
Kimball Co. estimated inventory purchases:
- January: $100,000
- February: $120,000
- March: $150,000
Payment pattern for purchases:
- 40% paid in month of purchase
- 50% paid in month following purchase
- 10% paid in second month following purchase
Forecast cash payments for inventory in March:
,A) $120,000
B) $130,000
C) $135,000
D) $140,000
Correct Answer: B) $130,000
Rationale:
Payments in March include:
- 10% January purchases: 0.10 × 100,000 = $10,000
- 50% February purchases: 0.50 × 120,000 = $60,000
- 40% March purchases: 0.40 × 150,000 = $60,000
Total = 10,000 + 60,000 + 60,000 = $130,000
This tests understanding of staggered payment schedules and cash
budgeting.
---
### 3. Which of the following is the government agency that stipulates the
rules and regulations governing the collection of taxes in the United States?
A) Securities and Exchange Commission (SEC)
B) Internal Revenue Service (IRS)
C) Financial Accounting Standards Board (FASB)
D) Government Accountability Office (GAO)
Correct Answer: B) Internal Revenue Service (IRS)
,Rationale: The IRS administers and enforces U.S. tax laws, regulating the
collection of federal taxes. Other agencies like the SEC regulate securities
but do not govern taxation.
---
### 4. Which of the following organizations has specific legal authority to
establish accounting standards for publicly held companies?
A) Financial Accounting Standards Board (FASB)
B) Securities and Exchange Commission (SEC)
C) International Accounting Standards Board (IASB)
D) American Institute of Certified Public Accountants (AICPA)
Correct Answer: B) Securities and Exchange Commission (SEC)
Rationale: The SEC is a government agency with legal authority to
oversee and enforce accounting regulations for publicly traded companies
in the U.S. Although FASB develops accounting principles, its standards
require SEC endorsement for legal enforcement.
---
### 5. Standards established by the International Accounting Standards
Board are referred to as:
A) Generally Accepted Accounting Principles (GAAP)
B) International Financial Reporting Standards (IFRS)
C) Public Company Accounting Oversight Board (PCAOB)
D) Statement of Financial Accounting Standards (SFAS)
,Correct Answer: B) International Financial Reporting Standards (IFRS)
Rationale: The IASB issues IFRS, a set of high-quality, globally accepted
accounting standards aimed at improving comparability of financial
statements worldwide.
---
### 6. The International Accounting Standards Board (IASB) is charged
with developing worldwide accounting practices:
A) True
B) False
Correct Answer: A) True
Rationale: IASB’s mission is to develop a common set of accounting
standards globally, promoting consistency and transparency across
international borders.
---
### 7. Which of the following is NOT a reason for the integration of
worldwide accounting standards?
A) Facilitate cross-border investment and capital flows
B) Improve comparability of financial information across countries
C) The theoretical necessity of a common set of accounting standards
D) Reduce costs associated with financial reporting and auditing
,Correct Answer: C) The theoretical necessity of a common set of
accounting standards
Rationale: The integration is driven largely by practical benefits such as
investment facilitation, comparability, and cost reduction. A “theoretical
necessity” is a weak justification compared to tangible business
advantages.
---
### 8. 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 the firm’s
performance:
A) True
B) False
Correct Answer: B) False
Rationale: Investors rely on published financial statements and disclosures
rather than direct access to companies’ internal databases to protect
confidentiality and proprietary information.
---
### 9. The Sarbanes-Oxley Act:
A) Reduced auditing requirements for publicly traded companies
B) Increased federal oversight of the audit process
C) Eliminated the need for external audits
,D) Applies only to private companies
Correct Answer: B) Increased federal oversight of the audit process
Rationale: Sarbanes-Oxley Act was enacted to strengthen corporate
governance and enhance auditor independence, increasing federal
oversight following corporate fraud scandals.
---
### 10. 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:
A) True
B) False
Correct Answer: A) True
Rationale: Transparency reduces information asymmetry, making lenders
more confident in the borrower's ability to repay and thus potentially
lowering interest cost.
---
### 11. Which of the following is NOT one of the three primary financial
statements?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
, D) Statement of Retained Earnings
Correct Answer: D) Statement of Retained Earnings
Rationale: The three primary financial statements are the Balance Sheet,
Income Statement, and Statement of Cash Flows. The Statement of
Retained Earnings is supplementary, reconciling equity changes.
### 12. One reason for a company preparing and providing financial
statements is to:
A) Increase sales volume
B) Reduce uncertainty for an investor regarding the firm’s future financial
performance
C) Decrease expenses
D) Avoid taxation
Correct Answer: B) Reduce uncertainty for an investor regarding the firm’s
future financial performance
Rationale: Financial statements provide investors with verified information
about the company’s financial status, helping reduce uncertainty in
investing decisions.
---
### 13. The idea that businesses must be accounted for as though they will
exist at least for the foreseeable future is called the:
A) Matching concept
