WGU C213 PA / OA Study Guide with
correct answers 2025>2026
ThevPublicvCompanyvAccountingvOversightvBoardv(PACOB)v-vcorrect-answers-
Whichvbodyvregulatesvavcertifiedvpublicvaccountingvfirm'svauditvpracticesvwhenvthevfirmvisvauditing
vavlargevpubliclyvtradedvcompany?
OwnershipvandvDebtv-vcorrect-answers-
Whatvtwovitemsvofvinformationvarevrevealedvonvthevbalancevsheet?
Reliablev-vcorrect-answers-Informationvthatvcanvbevverified
Relevantv-vcorrect-answers-Informationvhavingvtovdovwithvthevmattervatvhand
Materialv-vcorrect-answers-Informationvthatvisvimportantvenoughvtovmakevavdifference
Conservatismv-vcorrect-answers-Informationvrelatedvtovrecognizingvlossesvasvtheyvoccur
ThevindirectvmethodvisvmorevpopularvamongvlargevU.S.vcompaniesv-vcorrect-answers-
Whatvisvknownvaboutvthevdirectvandvindirectvmethodsvofvpreparingvstatementsvofvcashvflow?
,Theyvsearchvforvandvinvestigatevfraud.
&
Theyvreviewvfinancialvrecordsvandvinternalvcontrols.v-vcorrect-answers-
Whichvactionsvdovinternalvauditorsvperformvtovassistvinvmaintainingvthevintegrityvofvfinancialvstate
ments?
Theyvensurevthatvfinancialvstatementvusersvarevprovidedvwithvreliablevinformationvtovusevinvdecisi
onvmakingv-vcorrect-answers-
WhatvisvavsignificantvrolevofvthevU.S.vSecuritiesvandvExchangevCommissionv(SEC)vinvfinancialvreporti
ng?
Differentialvcostv-vcorrect-answers-
Whatvisvavcostvthatvwillvchangevinvthevfuturevbasedvuponvthevdecisionvmade?
Administrativevexpensesv&
Sellingvexpensesv-vcorrect-answers-Whichvarevexamplesvarevperiodvcosts?
Salaryvcostvofvthevreceptionist
Advertisingvcostv-vcorrect-answers-Avcompanyvmanufacturesvcustom-builtvwoodenvbookshelves.v
Whichvtwovcostsvwouldvthevcompanyvclassifyvasvperiodvcosts?v
AnswervChoices:vWoodvcost,vSalaryvcostvofvthevcraftsperson,vSalaryvcostvofvthevreceptionist,vAdver
tisingvcost
Directvlaborvcosts
Overheadvcostsv-vcorrect-answers-
Whichvtwovcostsvarevincludedvwhenvcalculatingvinventoryvcosts?
, Avcompanyvproducesvfivevdifferentvproducts.vThevproductsvarevhighlyvdifferentiatedvandvhavevsigni
ficantlyvdifferentvdemandsvforvtheirvusevofvoverheadvcosts.v-vcorrect-answers-
Invwhichvscenariovwouldvactivity-basedvcostingvbevmorevappropriatevthanvtraditionalvcosting?
Batch-levelvactivitiesv-vcorrect-answers-
WhichvcategoryvofvABCvactivitiesvarevmachinevsetupvandvmaterialvmovementvcostsvassociatedvwit
h?
ThevpricevofvProductvBvshouldvbevincreased.v-vcorrect-answers-
CompanyvAvcalculatedvthevfollowingvinformationvundervtraditionalvandvactivity-
basedvcostingvforvthevproductionvandvsalevofv1,000vunitsvofvProductvB:v
v
v TraditionalvABC
Salesv$100,000v$100,000
Costvofvgoodsvsoldv$70,000v$110,000
Grossvmarginv$30,000v($10,000)
WhichvdecisionvshouldvbevmadevaboutvthevsellingvpricevofvProductvB?
Profits
LevelvofvActivityv-vcorrect-answers-Whichvtwovconceptsvarevstudiedvinvcost-volume-
profitvanalysis?
Totalvfixedvcostsvwillvstayvthevsame.
Fixedvcostsvpervunitvwillvdecrease.v-vcorrect-answers-
Whatvarevtwovimpactsvonvcostsvasvsalesvvolumevincreases?
correct answers 2025>2026
ThevPublicvCompanyvAccountingvOversightvBoardv(PACOB)v-vcorrect-answers-
Whichvbodyvregulatesvavcertifiedvpublicvaccountingvfirm'svauditvpracticesvwhenvthevfirmvisvauditing
vavlargevpubliclyvtradedvcompany?
OwnershipvandvDebtv-vcorrect-answers-
Whatvtwovitemsvofvinformationvarevrevealedvonvthevbalancevsheet?
Reliablev-vcorrect-answers-Informationvthatvcanvbevverified
Relevantv-vcorrect-answers-Informationvhavingvtovdovwithvthevmattervatvhand
Materialv-vcorrect-answers-Informationvthatvisvimportantvenoughvtovmakevavdifference
Conservatismv-vcorrect-answers-Informationvrelatedvtovrecognizingvlossesvasvtheyvoccur
ThevindirectvmethodvisvmorevpopularvamongvlargevU.S.vcompaniesv-vcorrect-answers-
Whatvisvknownvaboutvthevdirectvandvindirectvmethodsvofvpreparingvstatementsvofvcashvflow?
,Theyvsearchvforvandvinvestigatevfraud.
&
Theyvreviewvfinancialvrecordsvandvinternalvcontrols.v-vcorrect-answers-
Whichvactionsvdovinternalvauditorsvperformvtovassistvinvmaintainingvthevintegrityvofvfinancialvstate
ments?
Theyvensurevthatvfinancialvstatementvusersvarevprovidedvwithvreliablevinformationvtovusevinvdecisi
onvmakingv-vcorrect-answers-
WhatvisvavsignificantvrolevofvthevU.S.vSecuritiesvandvExchangevCommissionv(SEC)vinvfinancialvreporti
ng?
Differentialvcostv-vcorrect-answers-
Whatvisvavcostvthatvwillvchangevinvthevfuturevbasedvuponvthevdecisionvmade?
Administrativevexpensesv&
Sellingvexpensesv-vcorrect-answers-Whichvarevexamplesvarevperiodvcosts?
Salaryvcostvofvthevreceptionist
Advertisingvcostv-vcorrect-answers-Avcompanyvmanufacturesvcustom-builtvwoodenvbookshelves.v
Whichvtwovcostsvwouldvthevcompanyvclassifyvasvperiodvcosts?v
AnswervChoices:vWoodvcost,vSalaryvcostvofvthevcraftsperson,vSalaryvcostvofvthevreceptionist,vAdver
tisingvcost
Directvlaborvcosts
Overheadvcostsv-vcorrect-answers-
Whichvtwovcostsvarevincludedvwhenvcalculatingvinventoryvcosts?
, Avcompanyvproducesvfivevdifferentvproducts.vThevproductsvarevhighlyvdifferentiatedvandvhavevsigni
ficantlyvdifferentvdemandsvforvtheirvusevofvoverheadvcosts.v-vcorrect-answers-
Invwhichvscenariovwouldvactivity-basedvcostingvbevmorevappropriatevthanvtraditionalvcosting?
Batch-levelvactivitiesv-vcorrect-answers-
WhichvcategoryvofvABCvactivitiesvarevmachinevsetupvandvmaterialvmovementvcostsvassociatedvwit
h?
ThevpricevofvProductvBvshouldvbevincreased.v-vcorrect-answers-
CompanyvAvcalculatedvthevfollowingvinformationvundervtraditionalvandvactivity-
basedvcostingvforvthevproductionvandvsalevofv1,000vunitsvofvProductvB:v
v
v TraditionalvABC
Salesv$100,000v$100,000
Costvofvgoodsvsoldv$70,000v$110,000
Grossvmarginv$30,000v($10,000)
WhichvdecisionvshouldvbevmadevaboutvthevsellingvpricevofvProductvB?
Profits
LevelvofvActivityv-vcorrect-answers-Whichvtwovconceptsvarevstudiedvinvcost-volume-
profitvanalysis?
Totalvfixedvcostsvwillvstayvthevsame.
Fixedvcostsvpervunitvwillvdecrease.v-vcorrect-answers-
Whatvarevtwovimpactsvonvcostsvasvsalesvvolumevincreases?
