WGC C213 COMPREHENSIVE EXAM PREP
QUESTIONS AND SOLUTIONS VERIFIED
STUDY RESOURCE
●● Which report summarizes cash collections and cash expenditures
from operating, investing, and financing activities over a period of time?
Answer: Statement of Cash Flows
●● 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 (PCAOB)
●● What is a common category in a statement of cash flows?
Answer: Cash from investing activities
●● Which cash flow category would include "cash received from
investors"?
Answer: Cash from financing activities
●● Which item is an investing activity?
Answer: Cash payments for purchase of plant assets
,●● What impact does the sale of equipment have on the statement of
cash flows?
Answer: Increase in cash from investing activities
●● 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 two actions do internal auditors perform to assist in
maintaining the integrity of financial statements?
Answer: They search for and investigate fraud and They review financial
records and internal controls.
●● What is a cost that will change in the future based upon the decision
made?
Answer: Differential cost
●● Which two costs are included when calculating inventory costs?
Answer: Direct labor and overhead
●● Which two examples are period costs?
Answer: Admin and Selling Expenses
, ●● Which category of ABC activities are machine setup and material
movement costs associated with?
Answer: Batch-level activities
●● A company manufactures custom-built wooden bookshelves. Which
two costs would the company classify as period costs?
Answer: Salary cost of the receptionist and Advertising 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 two concepts are studied in cost-volume-profit analysis?
Answer: Profits and Levels of Activity
●● The director of a marathon race wants to assign the cost of having
police officers along the race route to manage crowd control. Which
consideration is an appropriate cost driver?
Answer: The number of race participants and spectators
●● What are two impacts on costs as sales volume increases?
QUESTIONS AND SOLUTIONS VERIFIED
STUDY RESOURCE
●● Which report summarizes cash collections and cash expenditures
from operating, investing, and financing activities over a period of time?
Answer: Statement of Cash Flows
●● 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 (PCAOB)
●● What is a common category in a statement of cash flows?
Answer: Cash from investing activities
●● Which cash flow category would include "cash received from
investors"?
Answer: Cash from financing activities
●● Which item is an investing activity?
Answer: Cash payments for purchase of plant assets
,●● What impact does the sale of equipment have on the statement of
cash flows?
Answer: Increase in cash from investing activities
●● 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 two actions do internal auditors perform to assist in
maintaining the integrity of financial statements?
Answer: They search for and investigate fraud and They review financial
records and internal controls.
●● What is a cost that will change in the future based upon the decision
made?
Answer: Differential cost
●● Which two costs are included when calculating inventory costs?
Answer: Direct labor and overhead
●● Which two examples are period costs?
Answer: Admin and Selling Expenses
, ●● Which category of ABC activities are machine setup and material
movement costs associated with?
Answer: Batch-level activities
●● A company manufactures custom-built wooden bookshelves. Which
two costs would the company classify as period costs?
Answer: Salary cost of the receptionist and Advertising 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 two concepts are studied in cost-volume-profit analysis?
Answer: Profits and Levels of Activity
●● The director of a marathon race wants to assign the cost of having
police officers along the race route to manage crowd control. Which
consideration is an appropriate cost driver?
Answer: The number of race participants and spectators
●● What are two impacts on costs as sales volume increases?
