PASS YOUR 2025 WGU C213 FINAL EXAM
ACCOUNTING FOR DECISION MAKERS ACTUAL
QUESTIONS AND VERIFIED ANSWERS, 100%
GUARANTEE PASS
What does accounting focus on - ANSWER-The impact a business 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? - ANSWER-Statement of cash flows
Which benefit does a corporation gain by following generally accepted accounting principles (GAAP) -
ANSWER-An increase in its comparability to other companies
Which users would have a primary concern with an organizations ability to provide healthcare
benefits - ANSWER-Employees
Which body regulates a CPA firms audit practices when the firm is auditing a large publicly traded
company? - ANSWER-The PCAOB
What has the most significant impact on accounting practices - ANSWER-Information technology
What two items of information are revealed on the balance sheet? - ANSWER-ownership, Debt
Which term is defined as the residual interest in the net assets of a company? - ANSWER-Owners
equity
Which situation should result in revenue recognition on the income statement for the year ending if
the firm is using accrual basis accounting - ANSWER-A company provides services to a customer for
which cash will be collected the next year
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
Where would an investor find a summary of a company's significant accounting policies? - ANSWER-In
the notes to financial statements
Which assurance does an external audit report provide for its readers? - ANSWER-The company's
financial statements fairly reflect its financial position
Reliable - ANSWER-Information that can be verified
Relevent - ANSWER-Information having to do with the matter at hand
Material - ANSWER-Information that is important enough to make a difference
Conservatism - ANSWER-Information related to recognizing losses as they occur
Order the steps of the decision cycle from 1st to last - ANSWER-1) Prepare financial statements
2) Analyze financial statements
3) Gather information
4) Make decision
5) Implement decision
, What is consistent with a continual decline in gross profit if the firms cost of goods sold remains the
same? - ANSWER-Continual decrease in sales
Which form of debt should be reported in the long term liability category - ANSWER-Unearned
revenue that will be earned in 9 months
Which two values affect the measurement of net income? - ANSWER-Operating expenses, Ordinary
gains and losses
Which two items subtotals are included in a multistep income statement? - ANSWER-gross profit,
income from operations
What is a common category in a statement of cash flows? - ANSWER-Cash from investing acitivities
Which cash flow category would include cash received from investors? - ANSWER-Cash from financing
activities
Which item is an investing activity - ANSWER-Cash payments for plant assets
What impact does the sale of equipment have on the statement of cash flows? - ANSWER-Increase in
cash from investing activities
What is known about the direct and indirect methods of preparing statements of cash flow? -
ANSWER-The indirect method is more popular among large US companies
Which two examples represent financial statement errors - ANSWER-The accountant unintentionally
records amounts as revenue that were pre-paid by customers but not yet earned
The accounting department miscalculates the payroll tax due at year-end resulting in an inaccurate
liability
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 recieved - ANSWER-The inventory department
counts and inspects items as received and forwards the receiving record to accounts payable.
What are two common reasons for managers to manipulate reported earnings? - ANSWER-They are
preparing to qualify for a bank loan, They are feeling pressured to meet internal sales goals
Which two requirements must accounting firms that audit public companies meet under the sarbanes
- oxley act? - ANSWER-firms must report to and be retained by the audit committee rather than the
CFO or other company managmement
Firms must not provide certain non audit services to audit client, such as management functions or
legal services
Which two requirements must management of public companies meet under the sarbanes oxley act?
- ANSWER-They must provide an assessment of the effectiveness of internal controls with each
annual report
They must support a stronger board and audit committee
Which two actions do internal auditors perform to assist in maintaining the integrity of financial
statements? - ANSWER-They review financial records and internal controls
They search and investigate fraud
ACCOUNTING FOR DECISION MAKERS ACTUAL
QUESTIONS AND VERIFIED ANSWERS, 100%
GUARANTEE PASS
What does accounting focus on - ANSWER-The impact a business 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? - ANSWER-Statement of cash flows
Which benefit does a corporation gain by following generally accepted accounting principles (GAAP) -
ANSWER-An increase in its comparability to other companies
Which users would have a primary concern with an organizations ability to provide healthcare
benefits - ANSWER-Employees
Which body regulates a CPA firms audit practices when the firm is auditing a large publicly traded
company? - ANSWER-The PCAOB
What has the most significant impact on accounting practices - ANSWER-Information technology
What two items of information are revealed on the balance sheet? - ANSWER-ownership, Debt
Which term is defined as the residual interest in the net assets of a company? - ANSWER-Owners
equity
Which situation should result in revenue recognition on the income statement for the year ending if
the firm is using accrual basis accounting - ANSWER-A company provides services to a customer for
which cash will be collected the next year
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
Where would an investor find a summary of a company's significant accounting policies? - ANSWER-In
the notes to financial statements
Which assurance does an external audit report provide for its readers? - ANSWER-The company's
financial statements fairly reflect its financial position
Reliable - ANSWER-Information that can be verified
Relevent - ANSWER-Information having to do with the matter at hand
Material - ANSWER-Information that is important enough to make a difference
Conservatism - ANSWER-Information related to recognizing losses as they occur
Order the steps of the decision cycle from 1st to last - ANSWER-1) Prepare financial statements
2) Analyze financial statements
3) Gather information
4) Make decision
5) Implement decision
, What is consistent with a continual decline in gross profit if the firms cost of goods sold remains the
same? - ANSWER-Continual decrease in sales
Which form of debt should be reported in the long term liability category - ANSWER-Unearned
revenue that will be earned in 9 months
Which two values affect the measurement of net income? - ANSWER-Operating expenses, Ordinary
gains and losses
Which two items subtotals are included in a multistep income statement? - ANSWER-gross profit,
income from operations
What is a common category in a statement of cash flows? - ANSWER-Cash from investing acitivities
Which cash flow category would include cash received from investors? - ANSWER-Cash from financing
activities
Which item is an investing activity - ANSWER-Cash payments for plant assets
What impact does the sale of equipment have on the statement of cash flows? - ANSWER-Increase in
cash from investing activities
What is known about the direct and indirect methods of preparing statements of cash flow? -
ANSWER-The indirect method is more popular among large US companies
Which two examples represent financial statement errors - ANSWER-The accountant unintentionally
records amounts as revenue that were pre-paid by customers but not yet earned
The accounting department miscalculates the payroll tax due at year-end resulting in an inaccurate
liability
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 recieved - ANSWER-The inventory department
counts and inspects items as received and forwards the receiving record to accounts payable.
What are two common reasons for managers to manipulate reported earnings? - ANSWER-They are
preparing to qualify for a bank loan, They are feeling pressured to meet internal sales goals
Which two requirements must accounting firms that audit public companies meet under the sarbanes
- oxley act? - ANSWER-firms must report to and be retained by the audit committee rather than the
CFO or other company managmement
Firms must not provide certain non audit services to audit client, such as management functions or
legal services
Which two requirements must management of public companies meet under the sarbanes oxley act?
- ANSWER-They must provide an assessment of the effectiveness of internal controls with each
annual report
They must support a stronger board and audit committee
Which two actions do internal auditors perform to assist in maintaining the integrity of financial
statements? - ANSWER-They review financial records and internal controls
They search and investigate fraud
