WGU C213 Accounting For Decision
Makers Final Exam Actual Exam
2026/2027 – 100% Verified | Detailed
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Graded
Section 1: Accounting Fundamentals & GAAP (Questions 1–15)
Question 1
Which of the following best describes the primary purpose of financial
accounting?
A) To compute taxes owed to the government
B) To provide information for internal decision making by managers
C) To provide useful financial information to external decision makers
D) To maximize the company's stock price
Correct ,,,,answer,,,,: C
Rationale: Financial accounting focuses on providing information to
external users such as investors, creditors, and regulators. Managerial
accounting serves internal managers for decision-making purposes. Tax
computation is a separate function, and maximizing stock price is a
corporate objective, not the purpose of financial accounting.
,Question 2
Which accounting assumption assumes a business will continue
operating indefinitely?
A) Monetary unit assumption
B) Economic entity assumption
C) Going concern assumption
D) Periodicity assumption
Correct ,,,,answer,,,,: C
Rationale: The going concern assumption presumes that a business will
continue to operate indefinitely and will not be liquidated in the near
future. The periodicity assumption divides the business's life into
artificial time periods, the economic entity assumption separates the
owner from the business, and the monetary unit assumption assumes a
stable currency.
Question 3
Under accrual accounting, when are revenues recognized?
A) When cash is received from the customer
B) When the revenue is earned and realizable
C) At the end of the fiscal year
D) When the product is shipped
Correct ,,,,answer,,,,: B
Rationale: The revenue recognition principle requires that revenue be
recognized when it is earned and realizable, regardless of when cash is
received. This ensures proper matching with expenses and provides an
,accurate picture of period performance. Cash receipt is the basis for
cash-basis accounting, not accrual accounting.
Question 4
The matching principle requires that expenses be matched with:
A) The period in which they are paid
B) The revenues they help generate
C) Fixed assets only
D) Inventory costs only
Correct ,,,,answer,,,,: B
Rationale: The matching principle requires that expenses be recognized
in the same period as the revenues they helped generate. For example,
cost of goods sold is matched with sales revenue in the same period.
This principle ensures accurate profitability measurement and
compliance with GAAP.
Question 5
The accounting equation is:
A) Assets = Liabilities – Equity
B) Assets + Liabilities = Equity
C) Assets = Liabilities + Equity
D) Assets + Equity = Liabilities
Correct ,,,,answer,,,,: C
, Rationale: The fundamental accounting equation is Assets = Liabilities +
Stockholders' Equity. This equation is the foundation of double-entry
accounting and must always remain in balance. Every transaction affects
at least two accounts to maintain this equality.
Question 6
A company buys equipment for $50,000 cash. What is the effect on the
accounting equation?
A) Assets decrease, equity decreases
B) Assets increase, assets decrease (no net change)
C) Liabilities increase, assets increase
D) Equity increases, assets increase
Correct ,,,,answer,,,,: B
Rationale: One asset (equipment) increases by $50,000 while another
asset (cash) decreases by $50,000. Total assets remain unchanged, with
no effect on liabilities or equity. This is an example of an asset exchange
transaction.
Question 7
Which financial statement reports assets, liabilities, and equity at a
specific point in time?
A) Income statement
B) Statement of cash flows
Makers Final Exam Actual Exam
2026/2027 – 100% Verified | Detailed
Rationales – Pass Guaranteed – A+
Graded
Section 1: Accounting Fundamentals & GAAP (Questions 1–15)
Question 1
Which of the following best describes the primary purpose of financial
accounting?
A) To compute taxes owed to the government
B) To provide information for internal decision making by managers
C) To provide useful financial information to external decision makers
D) To maximize the company's stock price
Correct ,,,,answer,,,,: C
Rationale: Financial accounting focuses on providing information to
external users such as investors, creditors, and regulators. Managerial
accounting serves internal managers for decision-making purposes. Tax
computation is a separate function, and maximizing stock price is a
corporate objective, not the purpose of financial accounting.
,Question 2
Which accounting assumption assumes a business will continue
operating indefinitely?
A) Monetary unit assumption
B) Economic entity assumption
C) Going concern assumption
D) Periodicity assumption
Correct ,,,,answer,,,,: C
Rationale: The going concern assumption presumes that a business will
continue to operate indefinitely and will not be liquidated in the near
future. The periodicity assumption divides the business's life into
artificial time periods, the economic entity assumption separates the
owner from the business, and the monetary unit assumption assumes a
stable currency.
Question 3
Under accrual accounting, when are revenues recognized?
A) When cash is received from the customer
B) When the revenue is earned and realizable
C) At the end of the fiscal year
D) When the product is shipped
Correct ,,,,answer,,,,: B
Rationale: The revenue recognition principle requires that revenue be
recognized when it is earned and realizable, regardless of when cash is
received. This ensures proper matching with expenses and provides an
,accurate picture of period performance. Cash receipt is the basis for
cash-basis accounting, not accrual accounting.
Question 4
The matching principle requires that expenses be matched with:
A) The period in which they are paid
B) The revenues they help generate
C) Fixed assets only
D) Inventory costs only
Correct ,,,,answer,,,,: B
Rationale: The matching principle requires that expenses be recognized
in the same period as the revenues they helped generate. For example,
cost of goods sold is matched with sales revenue in the same period.
This principle ensures accurate profitability measurement and
compliance with GAAP.
Question 5
The accounting equation is:
A) Assets = Liabilities – Equity
B) Assets + Liabilities = Equity
C) Assets = Liabilities + Equity
D) Assets + Equity = Liabilities
Correct ,,,,answer,,,,: C
, Rationale: The fundamental accounting equation is Assets = Liabilities +
Stockholders' Equity. This equation is the foundation of double-entry
accounting and must always remain in balance. Every transaction affects
at least two accounts to maintain this equality.
Question 6
A company buys equipment for $50,000 cash. What is the effect on the
accounting equation?
A) Assets decrease, equity decreases
B) Assets increase, assets decrease (no net change)
C) Liabilities increase, assets increase
D) Equity increases, assets increase
Correct ,,,,answer,,,,: B
Rationale: One asset (equipment) increases by $50,000 while another
asset (cash) decreases by $50,000. Total assets remain unchanged, with
no effect on liabilities or equity. This is an example of an asset exchange
transaction.
Question 7
Which financial statement reports assets, liabilities, and equity at a
specific point in time?
A) Income statement
B) Statement of cash flows
