WGU C213 PA & OA STUDY GUIDE 2025 QUESTIONS AND ANSWERS
The Public Company Accounting Oversight Board (PACOB) - (answer)Which body regulates a certified
public accounting firm's audit practices when the firm is auditing a large publicly traded company?
Ownership and Debt - (answer)What two items of information are revealed on the balance sheet?
Reliable - (answer)Information that can be verified
Relevant - (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
The indirect method is more popular among large U.S. companies - (answer)What is known about the
direct and indirect methods of preparing statements of cash flow?
They search for and investigate fraud.
&
They review financial records and internal controls. - (answer)Which actions do internal auditors
perform to assist in maintaining the integrity of financial statements?
They ensure that financial statement users are provided with reliable information to use in decision
making - (answer)What is a significant role of the U.S. Securities and Exchange Commission (SEC) in
financial reporting?
Differential cost - (answer)What is a cost that will change in the future based upon the decision made?
Administrative expenses &
Selling expenses - (answer)Which are examples are period costs?
,WGU C213 PA & OA STUDY GUIDE 2025 QUESTIONS AND ANSWERS
Salary cost of the receptionist
Advertising cost - (answer)A company manufactures custom-built wooden bookshelves.
Which two costs would the company classify as period costs?
Answer Choices: Wood cost, Salary cost of the craftsperson, Salary cost of the receptionist, Advertising
cost
Direct labor costs
Overhead costs - (answer)Which two costs are included when calculating inventory costs?
A company produces five different products. The products are highly differentiated and have
significantly different demands for their use of overhead costs. - (answer)In which scenario would
activity-based costing be more appropriate than traditional costing?
Batch-level activities - (answer)Which category of ABC activities are machine setup and material
movement costs associated with?
The price of Product B should be increased. - (answer)Company A calculated the following information
under traditional and activity-based costing for the production and sale of 1,000 units of Product B:
Traditional ABC
Sales $100,000 $100,000
Cost of goods sold $70,000 $110,000
Gross margin $30,000 ($10,000)
Which decision should be made about the selling price of Product B?
Profits
Level of Activity - (answer)Which two concepts are studied in cost-volume-profit analysis?
, WGU C213 PA & OA STUDY GUIDE 2025 QUESTIONS AND ANSWERS
Total fixed costs will stay the same.
Fixed costs per unit will decrease. - (answer)What are two impacts on costs as sales volume increases?
Overstates owner's equity - (answer)If a company does NOT record accrued wages expense at the end of
the year, how does this affect the year-end financial statements?
Overstates assets - (answer)Failure to record the used portion of supplies on hand during the month has
the following effect on the financial statements prepared at the end of the month
Failure to record depreciation expense - (answer)Which one of the following errors causes net income
to be overstated?
Understatement of total assets and total liabilities - (answer)Recording the payment of an accounts
payable twice will result in?
Timing transactions so that large one-time gains and losses occur in the same quarter. -
(answer)Earnings management through strategic matching is exemplified by
Changing the useful life of a depreciable asset and fully disclosing it in the notes - (answer)Earnings
management through aggressive accounting is best exemplified by
Recording expenses as assets - (answer)Which of the following typically involves the use of non-GAAP
accounting?
Changing the interest rate used in accounting for leases without describing the change in the notes to
financial statements. - (answer)Earnings management through deceptive accounting is best exemplified
by
Audit committee - (answer)According to Sarbanes-Oxley who are auditors required to report to and be
retained by?
The Public Company Accounting Oversight Board (PACOB) - (answer)Which body regulates a certified
public accounting firm's audit practices when the firm is auditing a large publicly traded company?
Ownership and Debt - (answer)What two items of information are revealed on the balance sheet?
Reliable - (answer)Information that can be verified
Relevant - (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
The indirect method is more popular among large U.S. companies - (answer)What is known about the
direct and indirect methods of preparing statements of cash flow?
They search for and investigate fraud.
&
They review financial records and internal controls. - (answer)Which actions do internal auditors
perform to assist in maintaining the integrity of financial statements?
They ensure that financial statement users are provided with reliable information to use in decision
making - (answer)What is a significant role of the U.S. Securities and Exchange Commission (SEC) in
financial reporting?
Differential cost - (answer)What is a cost that will change in the future based upon the decision made?
Administrative expenses &
Selling expenses - (answer)Which are examples are period costs?
,WGU C213 PA & OA STUDY GUIDE 2025 QUESTIONS AND ANSWERS
Salary cost of the receptionist
Advertising cost - (answer)A company manufactures custom-built wooden bookshelves.
Which two costs would the company classify as period costs?
Answer Choices: Wood cost, Salary cost of the craftsperson, Salary cost of the receptionist, Advertising
cost
Direct labor costs
Overhead costs - (answer)Which two costs are included when calculating inventory costs?
A company produces five different products. The products are highly differentiated and have
significantly different demands for their use of overhead costs. - (answer)In which scenario would
activity-based costing be more appropriate than traditional costing?
Batch-level activities - (answer)Which category of ABC activities are machine setup and material
movement costs associated with?
The price of Product B should be increased. - (answer)Company A calculated the following information
under traditional and activity-based costing for the production and sale of 1,000 units of Product B:
Traditional ABC
Sales $100,000 $100,000
Cost of goods sold $70,000 $110,000
Gross margin $30,000 ($10,000)
Which decision should be made about the selling price of Product B?
Profits
Level of Activity - (answer)Which two concepts are studied in cost-volume-profit analysis?
, WGU C213 PA & OA STUDY GUIDE 2025 QUESTIONS AND ANSWERS
Total fixed costs will stay the same.
Fixed costs per unit will decrease. - (answer)What are two impacts on costs as sales volume increases?
Overstates owner's equity - (answer)If a company does NOT record accrued wages expense at the end of
the year, how does this affect the year-end financial statements?
Overstates assets - (answer)Failure to record the used portion of supplies on hand during the month has
the following effect on the financial statements prepared at the end of the month
Failure to record depreciation expense - (answer)Which one of the following errors causes net income
to be overstated?
Understatement of total assets and total liabilities - (answer)Recording the payment of an accounts
payable twice will result in?
Timing transactions so that large one-time gains and losses occur in the same quarter. -
(answer)Earnings management through strategic matching is exemplified by
Changing the useful life of a depreciable asset and fully disclosing it in the notes - (answer)Earnings
management through aggressive accounting is best exemplified by
Recording expenses as assets - (answer)Which of the following typically involves the use of non-GAAP
accounting?
Changing the interest rate used in accounting for leases without describing the change in the notes to
financial statements. - (answer)Earnings management through deceptive accounting is best exemplified
by
Audit committee - (answer)According to Sarbanes-Oxley who are auditors required to report to and be
retained by?
