WGU C213 PA & OA Study Guide (2025/2026
Latest Update) | Accounting for Decision
Makers | Complete Exam Prep & Q&A PDF
The impact a business's activities have on its overall financial performance - correct
answerWhat does accounting focus on?
Statement of cash flows - correct answerWhich report summarizes cash collections and
cash expenditures from operating, investing, and financing activities over a period of
time?
Employees - correct answerWhich users would have a primary concern with an
organization's ability to provide healthcare benefits?
An increase in its compatibility to other companies - correct answerWhich benefit does a
corporation gain by following Generally Accepted Accounting Principles (GAPP)?
The Public Company Accounting Oversight Board (PACOB) - correct answerWhich
body regulates a certified public accounting firm's audit practices when the firm is
auditing a large publicly traded company?
Information technology - correct answerWhat has had the most significant impact on
Accounting practices?
Ownership and Debt - correct answerWhat two items of information are revealed on the
balance sheet?
Owners equity - correct answerWhich term is defined as the residual in the net assets of
a company?
In 2014, a company provides services to a customer for which cash will be collected the
next year (2015). - correct answerWhich situation should result in revenue recognition
on the income statement for the year ending 12/31/14 if the firm is using accrual
accounting?
Cash from financing activities - correct answerWhich category on the statement of cash
flows summarizes cash receipts and payments to owners and creditors of the
company?
In the notes to financial statements - correct answerWhere would an investor find a
summary of a company's significant accounting policies?
,The company's financial statements fairly reflect its financial position - correct
answerWhich assurance does an external audit report provide for its readers?
Reliable - correct answerInformation that can be verified
Relevant - correct answerInformation having to do with the matter at hand
Material - correct answerInformation that is important enough to make a difference
Conservatism - correct answerInformation related to recognizing losses as they occur
Continual decrease in sales - correct answerWhat is consistent with a continual decline
in gross profit if the firm's cost of goods sold remains the same?
Notes payable expected to be paid in 18 months - correct answerWhich form of debt
should be reported in the long-term liability category?
Operating expenses &
Ordinary gains and losses - correct answerWhich values affect the measurement of net
income?
Gross profit &
Income from operations - correct answerWhich items' subtotals are included in a multi-
step income statement?
Cash from investing activities - correct answerWhat is a common category in a
statement of cash flows?
Cash from financing activities - correct answerWhich cash flow category would include
"cash received from investors"?
Cash payments for purchase of plant assets - correct answerWhich item is an investing
activity?
Increase in cash from investing activities - correct answerWhat impact does the sale of
equipment have on the statement of cash flows?
The indirect method is more popular among large U.S. companies - correct answerWhat
is known about the direct and indirect methods of preparing statements of cash flow?
The inventory department counts and inspects items as received and forwards the
receiving record to accounts payable. - correct answerWhich 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 received?
, Pressure to meet internal sales goals &
Preparing to qualify for a bank loan - correct answerWhat are common reasons for
managers to manipulate reported earnings?
Firms must not provide certain non-audit services to audit clients, such as management
functions or legal services. &
Firms must report to and be retained by the audit committee rather than the CFO or
other company management. - correct answerWhich requirements must accounting
firms that audit public companies meet under the Sarbanes-Oxley Act?
They search for and investigate fraud.
&
They review financial records and internal controls. - correct answerWhich 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 - correct answerWhat is a significant role of the U.S. Securities and
Exchange Commission (SEC) in financial reporting?
A better insight for management so a business can perform more effectively
&
A competitive edge to a business by providing its managers with the detailed data
needed to make decisions - correct answerWhat does management accounting
provide?
Management accounting is used primarily for internal planning, control, and evaluation.
- correct answerHow does management accounting differ from financial accounting?
Inventory - correct answerWhich account is seen on the balance sheet of a
manufacturing company but not on the balance sheet of a service-oriented company?
Differential cost - correct answerWhat is a cost that will change in the future based upon
the decision made?
Administrative expenses &
Selling expenses - correct answerWhich are examples are period costs?
Salary cost of the receptionist
Advertising cost - correct answerA 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
Latest Update) | Accounting for Decision
Makers | Complete Exam Prep & Q&A PDF
The impact a business's activities have on its overall financial performance - correct
answerWhat does accounting focus on?
Statement of cash flows - correct answerWhich report summarizes cash collections and
cash expenditures from operating, investing, and financing activities over a period of
time?
Employees - correct answerWhich users would have a primary concern with an
organization's ability to provide healthcare benefits?
An increase in its compatibility to other companies - correct answerWhich benefit does a
corporation gain by following Generally Accepted Accounting Principles (GAPP)?
The Public Company Accounting Oversight Board (PACOB) - correct answerWhich
body regulates a certified public accounting firm's audit practices when the firm is
auditing a large publicly traded company?
Information technology - correct answerWhat has had the most significant impact on
Accounting practices?
Ownership and Debt - correct answerWhat two items of information are revealed on the
balance sheet?
Owners equity - correct answerWhich term is defined as the residual in the net assets of
a company?
In 2014, a company provides services to a customer for which cash will be collected the
next year (2015). - correct answerWhich situation should result in revenue recognition
on the income statement for the year ending 12/31/14 if the firm is using accrual
accounting?
Cash from financing activities - correct answerWhich category on the statement of cash
flows summarizes cash receipts and payments to owners and creditors of the
company?
In the notes to financial statements - correct answerWhere would an investor find a
summary of a company's significant accounting policies?
,The company's financial statements fairly reflect its financial position - correct
answerWhich assurance does an external audit report provide for its readers?
Reliable - correct answerInformation that can be verified
Relevant - correct answerInformation having to do with the matter at hand
Material - correct answerInformation that is important enough to make a difference
Conservatism - correct answerInformation related to recognizing losses as they occur
Continual decrease in sales - correct answerWhat is consistent with a continual decline
in gross profit if the firm's cost of goods sold remains the same?
Notes payable expected to be paid in 18 months - correct answerWhich form of debt
should be reported in the long-term liability category?
Operating expenses &
Ordinary gains and losses - correct answerWhich values affect the measurement of net
income?
Gross profit &
Income from operations - correct answerWhich items' subtotals are included in a multi-
step income statement?
Cash from investing activities - correct answerWhat is a common category in a
statement of cash flows?
Cash from financing activities - correct answerWhich cash flow category would include
"cash received from investors"?
Cash payments for purchase of plant assets - correct answerWhich item is an investing
activity?
Increase in cash from investing activities - correct answerWhat impact does the sale of
equipment have on the statement of cash flows?
The indirect method is more popular among large U.S. companies - correct answerWhat
is known about the direct and indirect methods of preparing statements of cash flow?
The inventory department counts and inspects items as received and forwards the
receiving record to accounts payable. - correct answerWhich 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 received?
, Pressure to meet internal sales goals &
Preparing to qualify for a bank loan - correct answerWhat are common reasons for
managers to manipulate reported earnings?
Firms must not provide certain non-audit services to audit clients, such as management
functions or legal services. &
Firms must report to and be retained by the audit committee rather than the CFO or
other company management. - correct answerWhich requirements must accounting
firms that audit public companies meet under the Sarbanes-Oxley Act?
They search for and investigate fraud.
&
They review financial records and internal controls. - correct answerWhich 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 - correct answerWhat is a significant role of the U.S. Securities and
Exchange Commission (SEC) in financial reporting?
A better insight for management so a business can perform more effectively
&
A competitive edge to a business by providing its managers with the detailed data
needed to make decisions - correct answerWhat does management accounting
provide?
Management accounting is used primarily for internal planning, control, and evaluation.
- correct answerHow does management accounting differ from financial accounting?
Inventory - correct answerWhich account is seen on the balance sheet of a
manufacturing company but not on the balance sheet of a service-oriented company?
Differential cost - correct answerWhat is a cost that will change in the future based upon
the decision made?
Administrative expenses &
Selling expenses - correct answerWhich are examples are period costs?
Salary cost of the receptionist
Advertising cost - correct answerA 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
