WGU C213 Accounting for Decision Makers Exam Questions with Correct Answers Latest
Update 2025/2026
What does accounting focus on? - Answers The impact a business's activities have on it's
overall financial performance
Which report summarizes cash collections and cash expenditures from operating, investing,
and financing activities over a period of time? - Answers Statement of cash flows
Which users would have a primary concern with an organization's ability to provide healthcare
benefits? - Answers Employees
Which benefit does a corporation gain by following Generally Accepted Accounting Principals
(GAAP)? - Answers An increase in its comparability to other companies
Which body regulates a certified public accounting firm's audit practices when the firm is
auditing a large publicly traded company? - Answers The FASB
What has had the most significant impact on accounting practices? - Answers Information
Technology
What two items of information are revealed on the balance sheet? - Answers Debt, Ownership
Which term is defined as the residual interest in the net assets of a company? - Answers
Owner's equity
A corporation has total liabilities of $300 million, total owner's equity of $100 million, and
current assets of $50 million. What is the value of the firm's long-term assets? - Answers $350
million
Which situation should result in revenue recognition on the income statement for the year
ending 12/31/14 if the firm is using accrual-basis accounting? - Answers In 2014, a company
provides services to a customer for which cash will be collected the next year (2015)
Which category on the statement of cash flows summarizes cash receipts and payments to
owners and creditors of the company? - Answers Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting policies? -
Answers In the notes to the financial statements
What does it mean if a company has a debt ratio of 101.5%? - Answers The company has 1.5%
more total liabilities that total assets
Which assurances does an external audit report provide for its readers? - Answers The
company's financial statements fairly reflects its financial position
What is consistent with a continual decline in gross profit if the firm's cost of goods sold
, remains the same? - Answers Continual decrease in sales
Which formula yields a cash time interest earned ratio of 11? - Answers Cash before interest
and taxes of $11,000/cash paid for interest of $1,000
Which form of debt should be reported in the long-term liability category? - Answers Notes
payable expected to be paid in 18 months
Which two values affect the measurement of net income? - Answers Dividend paid, operating
expenses
Which two items subtotals are included in a multi-step income statement? - Answers gross
profit, income from operations
A furniture company using accrual accounting purchased 20 sofas in November 2011, In
December 2011, 8 of the sofas were sold to customers. The customers all signed contracts
agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012.
At the time of sale, the company was reasonably sure the customers would pay the amount
owed.
In which month should advertising costs be expended? - Answers November 2011
On May 1, 2011, a company using accural accounting purchased equipment costing $500,000. It
expects the equipment to have a useful life of five years. At the time of purchase, the company
also purchased a one-year insurance policy on this equipment, which cost $6,000.
How much insurance expense should the company have recognized of the year ending in 2011?
- Answers $4,000
What was the 2012 net profit amount if the 2013 pro-forma net profit of $187,000 was based on
a 22% increase? - Answers $153,279
What is a common category in a statement of cash flows? - Answers Cash from investing
activities
Which cash flow category would include cash received from investors? - Answers Cash from
financing activites
Which item is an investing activity? - Answers Cash payments for purchase of plant assests
What impact does the sale of equipment have on the statement of cash flows? - Answers
Increase in cash from investing activities
Update 2025/2026
What does accounting focus on? - Answers The impact a business's activities have on it's
overall financial performance
Which report summarizes cash collections and cash expenditures from operating, investing,
and financing activities over a period of time? - Answers Statement of cash flows
Which users would have a primary concern with an organization's ability to provide healthcare
benefits? - Answers Employees
Which benefit does a corporation gain by following Generally Accepted Accounting Principals
(GAAP)? - Answers An increase in its comparability to other companies
Which body regulates a certified public accounting firm's audit practices when the firm is
auditing a large publicly traded company? - Answers The FASB
What has had the most significant impact on accounting practices? - Answers Information
Technology
What two items of information are revealed on the balance sheet? - Answers Debt, Ownership
Which term is defined as the residual interest in the net assets of a company? - Answers
Owner's equity
A corporation has total liabilities of $300 million, total owner's equity of $100 million, and
current assets of $50 million. What is the value of the firm's long-term assets? - Answers $350
million
Which situation should result in revenue recognition on the income statement for the year
ending 12/31/14 if the firm is using accrual-basis accounting? - Answers In 2014, a company
provides services to a customer for which cash will be collected the next year (2015)
Which category on the statement of cash flows summarizes cash receipts and payments to
owners and creditors of the company? - Answers Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting policies? -
Answers In the notes to the financial statements
What does it mean if a company has a debt ratio of 101.5%? - Answers The company has 1.5%
more total liabilities that total assets
Which assurances does an external audit report provide for its readers? - Answers The
company's financial statements fairly reflects its financial position
What is consistent with a continual decline in gross profit if the firm's cost of goods sold
, remains the same? - Answers Continual decrease in sales
Which formula yields a cash time interest earned ratio of 11? - Answers Cash before interest
and taxes of $11,000/cash paid for interest of $1,000
Which form of debt should be reported in the long-term liability category? - Answers Notes
payable expected to be paid in 18 months
Which two values affect the measurement of net income? - Answers Dividend paid, operating
expenses
Which two items subtotals are included in a multi-step income statement? - Answers gross
profit, income from operations
A furniture company using accrual accounting purchased 20 sofas in November 2011, In
December 2011, 8 of the sofas were sold to customers. The customers all signed contracts
agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012.
At the time of sale, the company was reasonably sure the customers would pay the amount
owed.
In which month should advertising costs be expended? - Answers November 2011
On May 1, 2011, a company using accural accounting purchased equipment costing $500,000. It
expects the equipment to have a useful life of five years. At the time of purchase, the company
also purchased a one-year insurance policy on this equipment, which cost $6,000.
How much insurance expense should the company have recognized of the year ending in 2011?
- Answers $4,000
What was the 2012 net profit amount if the 2013 pro-forma net profit of $187,000 was based on
a 22% increase? - Answers $153,279
What is a common category in a statement of cash flows? - Answers Cash from investing
activities
Which cash flow category would include cash received from investors? - Answers Cash from
financing activites
Which item is an investing activity? - Answers Cash payments for purchase of plant assests
What impact does the sale of equipment have on the statement of cash flows? - Answers
Increase in cash from investing activities
