WGU C213 PA / OA STUDY GUIDE | TOP SCORES
MADE SIMPLE | TRUSTED TEST SOLUTIONS!
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? Answer: The Public Company
Accounting Oversight Board (PACOB)
What two items of information are revealed on the balance sheet? Answer:
Ownership and Debt
Information that can be verified Answer: Reliable
Information having to do with the matter at hand Answer: Relevant
Information that is important enough to make a difference Answer: Material
Information related to recognizing losses as they occur Answer: Conservatism
What is known about the direct and indirect methods of preparing statements of cash
flow? Answer: The indirect method is more popular among large U.S. companies
Which actions do internal auditors perform to assist in maintaining the integrity of
financial statements? Answer: They search for and investigate fraud.
&
They review financial records and internal controls.
What is a significant role of the U.S. Securities and Exchange Commission (SEC) in
financial reporting? Answer: They ensure that financial statement users are
provided with reliable information to use in decision making
What is a cost that will change in the future based upon the decision made?
Answer: Differential cost
1
APPHIA - Crafted with Care and Precision for Academic Excellence.
, Which are examples are period costs? Answer: Administrative expenses &
Selling expenses
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 Answer: Salary cost of the receptionist
Advertising cost
Which two costs are included when calculating inventory costs? Answer: Direct
labor costs
Overhead costs
In which scenario would activity-based costing be more appropriate than traditional
costing? Answer: A company produces five different products. The products are
highly differentiated and have significantly different demands for their use of
overhead costs.
Which category of ABC activities are machine setup and material movement costs
associated with? Answer: Batch-level activities
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)
2
APPHIA - Crafted with Care and Precision for Academic Excellence.
MADE SIMPLE | TRUSTED TEST SOLUTIONS!
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? Answer: The Public Company
Accounting Oversight Board (PACOB)
What two items of information are revealed on the balance sheet? Answer:
Ownership and Debt
Information that can be verified Answer: Reliable
Information having to do with the matter at hand Answer: Relevant
Information that is important enough to make a difference Answer: Material
Information related to recognizing losses as they occur Answer: Conservatism
What is known about the direct and indirect methods of preparing statements of cash
flow? Answer: The indirect method is more popular among large U.S. companies
Which actions do internal auditors perform to assist in maintaining the integrity of
financial statements? Answer: They search for and investigate fraud.
&
They review financial records and internal controls.
What is a significant role of the U.S. Securities and Exchange Commission (SEC) in
financial reporting? Answer: They ensure that financial statement users are
provided with reliable information to use in decision making
What is a cost that will change in the future based upon the decision made?
Answer: Differential cost
1
APPHIA - Crafted with Care and Precision for Academic Excellence.
, Which are examples are period costs? Answer: Administrative expenses &
Selling expenses
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 Answer: Salary cost of the receptionist
Advertising cost
Which two costs are included when calculating inventory costs? Answer: Direct
labor costs
Overhead costs
In which scenario would activity-based costing be more appropriate than traditional
costing? Answer: A company produces five different products. The products are
highly differentiated and have significantly different demands for their use of
overhead costs.
Which category of ABC activities are machine setup and material movement costs
associated with? Answer: Batch-level activities
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)
2
APPHIA - Crafted with Care and Precision for Academic Excellence.
