WGU C213 Accounting for Decision
Makers Objective Assessment Exam
Questions And Correct Answers
(Verified Answers) Plus Rationales 2027
Q&A | Instant Download Pdf
1. Which of the following best describes managerial accounting?
A. Reporting financial information to external users
B. Providing tax information to the government
C. Providing financial information for internal decision-making
D. Preparing audited financial statements
Managerial accounting focuses on generating and analyzing
financial information for internal users such as managers to
support planning, controlling, and decision-making, rather than
external reporting.
2. Which financial statement shows a company’s financial position at
a specific point in time?
A. Income statement
B. Statement of cash flows
, C. Statement of retained earnings
D. Balance sheet
The balance sheet reports assets, liabilities, and equity at a
specific date, reflecting the company’s financial position at that
moment.
3. What is the basic accounting equation?
A. Assets = Revenue – Expenses
B. Liabilities = Assets + Equity
C. Assets = Liabilities + Equity
D. Equity = Assets + Expenses
The accounting equation shows that a company’s resources
(assets) are financed by creditors (liabilities) and owners (equity).
4. Which cost is considered a fixed cost?
A. Direct materials
B. Sales commissions
C. Rent expense
D. Cost of goods sold
Fixed costs remain constant in total regardless of production or
sales volume, such as rent or salaried supervisors.
5. Which of the following is a variable cost?
A. Depreciation on equipment
, B. Direct materials
C. Rent
D. Property taxes
Variable costs change in direct proportion to production volume,
such as raw materials used in production.
6. What is contribution margin?
A. Sales – Fixed costs
B. Net income – Variable costs
C. Sales – Variable costs
D. Fixed costs – Sales
Contribution margin represents the amount remaining from sales
revenue after variable costs are deducted, used to cover fixed
costs and profit.
7. Which statement is true about breakeven point?
A. It is where revenue is zero
B. It is where total revenue equals total costs
C. It is where variable costs exceed fixed costs
D. It is always negative profit
Breakeven occurs when a company’s total revenues exactly equal
total costs, resulting in zero profit or loss.
, 8. What is the primary purpose of budgeting?
A. To increase taxes
B. To plan and control operations
C. To eliminate fixed costs
D. To replace financial statements
Budgets help organizations plan future activities and control
performance by comparing actual results to planned outcomes.
9. Which budget is prepared first in the budgeting process?
A. Cash budget
B. Direct materials budget
C. Sales budget
D. Production budget
The sales budget is typically the starting point because it drives
most other operational budgets.
10. What does FIFO stand for in inventory costing?
A. Final In First Out
B. Fixed In Fixed Out
C. First In First Out
D. First In Final Out
FIFO assumes that the oldest inventory costs are assigned to cost
of goods sold first.
Makers Objective Assessment Exam
Questions And Correct Answers
(Verified Answers) Plus Rationales 2027
Q&A | Instant Download Pdf
1. Which of the following best describes managerial accounting?
A. Reporting financial information to external users
B. Providing tax information to the government
C. Providing financial information for internal decision-making
D. Preparing audited financial statements
Managerial accounting focuses on generating and analyzing
financial information for internal users such as managers to
support planning, controlling, and decision-making, rather than
external reporting.
2. Which financial statement shows a company’s financial position at
a specific point in time?
A. Income statement
B. Statement of cash flows
, C. Statement of retained earnings
D. Balance sheet
The balance sheet reports assets, liabilities, and equity at a
specific date, reflecting the company’s financial position at that
moment.
3. What is the basic accounting equation?
A. Assets = Revenue – Expenses
B. Liabilities = Assets + Equity
C. Assets = Liabilities + Equity
D. Equity = Assets + Expenses
The accounting equation shows that a company’s resources
(assets) are financed by creditors (liabilities) and owners (equity).
4. Which cost is considered a fixed cost?
A. Direct materials
B. Sales commissions
C. Rent expense
D. Cost of goods sold
Fixed costs remain constant in total regardless of production or
sales volume, such as rent or salaried supervisors.
5. Which of the following is a variable cost?
A. Depreciation on equipment
, B. Direct materials
C. Rent
D. Property taxes
Variable costs change in direct proportion to production volume,
such as raw materials used in production.
6. What is contribution margin?
A. Sales – Fixed costs
B. Net income – Variable costs
C. Sales – Variable costs
D. Fixed costs – Sales
Contribution margin represents the amount remaining from sales
revenue after variable costs are deducted, used to cover fixed
costs and profit.
7. Which statement is true about breakeven point?
A. It is where revenue is zero
B. It is where total revenue equals total costs
C. It is where variable costs exceed fixed costs
D. It is always negative profit
Breakeven occurs when a company’s total revenues exactly equal
total costs, resulting in zero profit or loss.
, 8. What is the primary purpose of budgeting?
A. To increase taxes
B. To plan and control operations
C. To eliminate fixed costs
D. To replace financial statements
Budgets help organizations plan future activities and control
performance by comparing actual results to planned outcomes.
9. Which budget is prepared first in the budgeting process?
A. Cash budget
B. Direct materials budget
C. Sales budget
D. Production budget
The sales budget is typically the starting point because it drives
most other operational budgets.
10. What does FIFO stand for in inventory costing?
A. Final In First Out
B. Fixed In Fixed Out
C. First In First Out
D. First In Final Out
FIFO assumes that the oldest inventory costs are assigned to cost
of goods sold first.
