WGU C213 PRE ASSESSMENT EXAM QUESTIONS AND
ANSWERS GRADED A+ 2025
1. What does accounting focus on? ANS >> The impact a business's activities
have on its overall financial performance
2. Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time? ANS >>
Statement of cash flows
3. Which users would have a primary concern with an organization's ability to
provide healthcare benefits? ANS >> Employees
4. Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company? ANS >> The Public
Com- pany Accounting Oversight Board (PCAOB)
5. What has had the most significant impact on accounting practices? ANS >>
Infor- mation technology
6. What two items of information are revealed on the balance sheet?
Choose 2 answers ANS >>
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, Ownership. Debt
7. Which term is defined as the residual interest in the net assets of a compa-
ny? ANS >> Owners' equity
8. A corporation has total liabilities of $300 million, total owners' equity of $100
million, and current assets of $50 million.
What is the value of the firm's long-term assets? ANS >> $350 million
9. Which situation should result in revenue recognition on the income state-
ment for the year ending 12/31/14 if the firm is using accrual-basis account-
ing? ANS >> In 2014, a company provides services to a customer for which cash
will be collected the next year (2015).
10. Which category on the statement of cash flows summarizes cash receipts
and payments to owners and creditors of the company? ANS >> Cash flows
from financing activities
11. Where would an investor find a summary of a company's significant ac-
counting policies? ANS >> In the notes to financial statements
12. Which assurance does an external audit report provide for its readers? AN
>> -
The company's financial statements fairly reflect its financial position
13. Reliable ANS >> Information that can be verified
14. Relevant ANS >> Information having to do with the matter at hand
15. Material ANS >> Information that is important enough to make a difference
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, 16. Conservatism ANS >> Information related to recognizing losses as they occur
17. What are steps in the decision cycle? ANS >> 1 Prepare financial
statements. 2 Analyze financial statements.
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, 3 Gather information.
4 Make decision.
5 Implement decision.
18. Partial financial information for a company is as follows ANS >>
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
What is the price-earnings (PE) ratio for this company? ANS >> 11.0
19. What is consistent with a continual decline in gross profit if the firm's cost
of goods sold remains the same? ANS >> Continual decrease in sales
20. Which two cash flow adequacy ratios represent a cash cow? ANS >> -
$6,991/$5,486. $5,220/$1,875.
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ANSWERS GRADED A+ 2025
1. What does accounting focus on? ANS >> The impact a business's activities
have on its overall financial performance
2. Which report summarizes cash collections and cash expenditures from
operating, investing, and financing activities over a period of time? ANS >>
Statement of cash flows
3. Which users would have a primary concern with an organization's ability to
provide healthcare benefits? ANS >> Employees
4. Which body regulates a certified public accounting firm's audit practices
when the firm is auditing a large publicly traded company? ANS >> The Public
Com- pany Accounting Oversight Board (PCAOB)
5. What has had the most significant impact on accounting practices? ANS >>
Infor- mation technology
6. What two items of information are revealed on the balance sheet?
Choose 2 answers ANS >>
mailto:https://www.stuvia.com/en-us/user/techgrades
, Ownership. Debt
7. Which term is defined as the residual interest in the net assets of a compa-
ny? ANS >> Owners' equity
8. A corporation has total liabilities of $300 million, total owners' equity of $100
million, and current assets of $50 million.
What is the value of the firm's long-term assets? ANS >> $350 million
9. Which situation should result in revenue recognition on the income state-
ment for the year ending 12/31/14 if the firm is using accrual-basis account-
ing? ANS >> In 2014, a company provides services to a customer for which cash
will be collected the next year (2015).
10. Which category on the statement of cash flows summarizes cash receipts
and payments to owners and creditors of the company? ANS >> Cash flows
from financing activities
11. Where would an investor find a summary of a company's significant ac-
counting policies? ANS >> In the notes to financial statements
12. Which assurance does an external audit report provide for its readers? AN
>> -
The company's financial statements fairly reflect its financial position
13. Reliable ANS >> Information that can be verified
14. Relevant ANS >> Information having to do with the matter at hand
15. Material ANS >> Information that is important enough to make a difference
mailto:https://www.stuvia.com/en-us/user/techgrades
, 16. Conservatism ANS >> Information related to recognizing losses as they occur
17. What are steps in the decision cycle? ANS >> 1 Prepare financial
statements. 2 Analyze financial statements.
mailto:https://www.stuvia.com/en-us/user/techgrades
, 3 Gather information.
4 Make decision.
5 Implement decision.
18. Partial financial information for a company is as follows ANS >>
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
What is the price-earnings (PE) ratio for this company? ANS >> 11.0
19. What is consistent with a continual decline in gross profit if the firm's cost
of goods sold remains the same? ANS >> Continual decrease in sales
20. Which two cash flow adequacy ratios represent a cash cow? ANS >> -
$6,991/$5,486. $5,220/$1,875.
mailto:https://www.stuvia.com/en-us/user/techgrades
