1
WGU C213 Study Guide 2025/2026 Exam
Questions and Answers | A+ Score
Assured
purpose of accounting - 🧠 ANSWER ✔✔Accounting is the recording of the day-to-
day financial activities of a company and the organization of that information into
summary reports used to evaluate the company's financial status.
Bookkeeping is a part of accounting. Bookkeeping refers to the process of
recording transactions into various accounts, which is the first step in accounting.
The next step is to analyze the accounts and organize them into financial
statements and other useful reports. (Reference topic 1.1)
The balance sheet - 🧠 ANSWER ✔✔reports a company's assets, liabilities, and
owners' equity. It reports the financial position of a firm at a point in time.
income statement - 🧠 ANSWER ✔✔reports the amount of net income earned by a
company during a period. Net income is the excess of a company's revenues over
its expenses. It reports the financial performance of a firm over a period of time.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
1
STATEMENT. ALL RIGHTS RESERVED
,2
statement of cash flows - 🧠 ANSWER ✔✔reports the amount of cash collected and
paid out by a company in the following three types of activities: operating,
investing, and financing over a period of time. (Reference topic 1.2)
Fin Statement Users: Lenders - 🧠 ANSWER ✔✔Banks use companies' financial
statements in making decisions about commercial loans. The financial statements
are useful because they help the lender predict the future ability of the borrower to
repay the loan.
Fin Statement Users: Investors - 🧠 ANSWER ✔✔Investors want information to
help them estimate how much cash they can expect to directly receive from the
business in the future if they invest in it now.
Fin Statement Users: Company Management - 🧠 ANSWER ✔✔Managers use
financial accounting data to formulate company goals, to compute bonuses for
employees, and to illuminate company weaknesses.
Fin Statement Users: Suppliers and Customers - 🧠 ANSWER ✔✔Suppliers,
customers, and employees use financial statements to tell them about the long-run
prospects of a company.
Fin Statement Users: Employees - 🧠 ANSWER ✔✔Financial statement data, as
mentioned earlier, are used in determining employee bonuses. In addition, financial
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
,3
accounting information can help an employee evaluate the employer's ability to
fulfill its long-run promises, such as for pensions and retiree health care benefits.
Financial statements are also important in contract negotiations between labor and
management.
Fin Statement Users: Competitors - 🧠 ANSWER ✔✔Competitors use financial
accounting information to reveal strategic opportunities within their industry.
Government Agencies - 🧠 ANSWER ✔✔Government agencies use financial
statement data to bolster political and regulatory positions for and against
companies.
Fin Statement Users: The Press - 🧠 ANSWER ✔✔Reporters use financial
accounting data as background information and to indicate which companies are
undergoing significant changes in financial status. (Reference Topic 1.3)
Fin Statement Users: Politicians - 🧠 ANSWER ✔✔Politicians use financial
statement data to bolster political and regulatory positions for and against
companies.
Acct Rules: Financial Accountings Standards Board (FASB) - 🧠 ANSWER
✔✔sets accounting rules for the private section in the U.S.. It is a private, non-
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, 4
profit body established and supported by the joint efforts of the U.S. business
community, financial analysts, and practicing accountants.
The FASB has no legal power to enforce the accounting standards it sets but
maintains its influence by carefully protecting its prestige and reputation. The
standards it sets are called Generally Accepted Accounting Standards (GAAP).
These are a common set of accounting principles, standards, and procedures that
companies must follow when they compile their financial statements. (Reference
Topic 1.4)
Acct Rules: Securities and Exchange Commission (SEC) - 🧠 ANSWER ✔✔has the
legal authority to set accounting rules, but has deferred that responsibility to the
FASB in most cases. The SEC regulates U.S. stock exchanges and seeks to create a
fair information environment in which investors can buy and sell stocks without
fear that companies who sell stocks to the general public are hiding or
manipulating financial data. (Reference topic 1.5)
Acct Org: CPA Accreditation - 🧠 ANSWER ✔✔The American Institute of
Certified Public Accountants (AICPA) is the professional organization of certified
public accountants (CPAs) in the United States. A CPA is someone who has taken
a minimum number of college-level accounting classes, has passed the CPA exam,
and has met other requirements set by his or her state. A CPA firm is a company
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
4
STATEMENT. ALL RIGHTS RESERVED
WGU C213 Study Guide 2025/2026 Exam
Questions and Answers | A+ Score
Assured
purpose of accounting - 🧠 ANSWER ✔✔Accounting is the recording of the day-to-
day financial activities of a company and the organization of that information into
summary reports used to evaluate the company's financial status.
Bookkeeping is a part of accounting. Bookkeeping refers to the process of
recording transactions into various accounts, which is the first step in accounting.
The next step is to analyze the accounts and organize them into financial
statements and other useful reports. (Reference topic 1.1)
The balance sheet - 🧠 ANSWER ✔✔reports a company's assets, liabilities, and
owners' equity. It reports the financial position of a firm at a point in time.
income statement - 🧠 ANSWER ✔✔reports the amount of net income earned by a
company during a period. Net income is the excess of a company's revenues over
its expenses. It reports the financial performance of a firm over a period of time.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
1
STATEMENT. ALL RIGHTS RESERVED
,2
statement of cash flows - 🧠 ANSWER ✔✔reports the amount of cash collected and
paid out by a company in the following three types of activities: operating,
investing, and financing over a period of time. (Reference topic 1.2)
Fin Statement Users: Lenders - 🧠 ANSWER ✔✔Banks use companies' financial
statements in making decisions about commercial loans. The financial statements
are useful because they help the lender predict the future ability of the borrower to
repay the loan.
Fin Statement Users: Investors - 🧠 ANSWER ✔✔Investors want information to
help them estimate how much cash they can expect to directly receive from the
business in the future if they invest in it now.
Fin Statement Users: Company Management - 🧠 ANSWER ✔✔Managers use
financial accounting data to formulate company goals, to compute bonuses for
employees, and to illuminate company weaknesses.
Fin Statement Users: Suppliers and Customers - 🧠 ANSWER ✔✔Suppliers,
customers, and employees use financial statements to tell them about the long-run
prospects of a company.
Fin Statement Users: Employees - 🧠 ANSWER ✔✔Financial statement data, as
mentioned earlier, are used in determining employee bonuses. In addition, financial
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
2
STATEMENT. ALL RIGHTS RESERVED
,3
accounting information can help an employee evaluate the employer's ability to
fulfill its long-run promises, such as for pensions and retiree health care benefits.
Financial statements are also important in contract negotiations between labor and
management.
Fin Statement Users: Competitors - 🧠 ANSWER ✔✔Competitors use financial
accounting information to reveal strategic opportunities within their industry.
Government Agencies - 🧠 ANSWER ✔✔Government agencies use financial
statement data to bolster political and regulatory positions for and against
companies.
Fin Statement Users: The Press - 🧠 ANSWER ✔✔Reporters use financial
accounting data as background information and to indicate which companies are
undergoing significant changes in financial status. (Reference Topic 1.3)
Fin Statement Users: Politicians - 🧠 ANSWER ✔✔Politicians use financial
statement data to bolster political and regulatory positions for and against
companies.
Acct Rules: Financial Accountings Standards Board (FASB) - 🧠 ANSWER
✔✔sets accounting rules for the private section in the U.S.. It is a private, non-
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, 4
profit body established and supported by the joint efforts of the U.S. business
community, financial analysts, and practicing accountants.
The FASB has no legal power to enforce the accounting standards it sets but
maintains its influence by carefully protecting its prestige and reputation. The
standards it sets are called Generally Accepted Accounting Standards (GAAP).
These are a common set of accounting principles, standards, and procedures that
companies must follow when they compile their financial statements. (Reference
Topic 1.4)
Acct Rules: Securities and Exchange Commission (SEC) - 🧠 ANSWER ✔✔has the
legal authority to set accounting rules, but has deferred that responsibility to the
FASB in most cases. The SEC regulates U.S. stock exchanges and seeks to create a
fair information environment in which investors can buy and sell stocks without
fear that companies who sell stocks to the general public are hiding or
manipulating financial data. (Reference topic 1.5)
Acct Org: CPA Accreditation - 🧠 ANSWER ✔✔The American Institute of
Certified Public Accountants (AICPA) is the professional organization of certified
public accountants (CPAs) in the United States. A CPA is someone who has taken
a minimum number of college-level accounting classes, has passed the CPA exam,
and has met other requirements set by his or her state. A CPA firm is a company
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
4
STATEMENT. ALL RIGHTS RESERVED
