WESTERN GOVERNORS UNIVERSITY
WGU C213 Final Exam
Practice Question Bank
Accounting for Decision Makers — NCLEX-Style Practice Questions with
Rationales
Comprehensive Review: Financial Statements, Cost Accounting, Cash Flows &
More
Edition 1 · July 2026
Table of Contents
1. Instructions for Use 2
2. Practice Questions with Answers & Rationales 2
WGU C213 · Western Governors University Page 1
,WGU C213 FINAL EXAM PRACTICE GUIDE INSTRUCTIONS & PRACTICE QUESTIONS
How to Use This Guide
Read each stem, choose your answer, then check the rationale directly below it. The correct
option is marked, and each wrong option is explained so you understand why it's wrong — not
just that it is.
Category: Accounting for Decision Makers — Comprehensive Final Review
1 What is the order of assets listed on the balance sheet?
A Assets are listed in the order of liquidity — cash, marketable investments, accounts
receivable, inventory, long-term investments, fixed assets, and intangibles
B Assets are listed alphabetically
C Assets are listed by dollar amount, largest to smallest
D Assets are listed in order of acquisition date
Why A is correct: Assets are listed in order of liquidity, with cash first followed by
marketable investments, accounts receivable, inventory, long-term investments, fixed assets,
and intangibles.
B — Alphabetical order is not used for balance sheet presentation.
C — Dollar amount ordering is not the standard.
D — Acquisition date is not the ordering method.
,2 What is the difference between a manufacturing company and a service company
in terms of costs?
A Service companies have higher selling costs
B A manufacturing company has direct materials (inventory) while a service company
does not
C Manufacturing companies have no period costs
D Service companies have manufacturing overhead
Why B is correct: The only difference is that a manufacturing company has direct materials
(inventory); service companies do not.
A — Both types of companies have selling costs.
C — Manufacturing companies have period costs too.
D — Service companies do not have manufacturing overhead.
3 When evaluating a historical income statement to project a future income statement,
what is the first step?
A Convert the income statement into a common-sized income statement
B Multiply sales by the growth rate
C Calculate net income for the projected year
D Determine the tax rate
Why A is correct: The first step is to convert the income statement into a common-sized
income statement, then multiply projected sales by the percentages.
B — This is done after converting to common-sized percentages.
C — Net income is calculated after projecting all line items.
D — Tax rate determination is part of the process but not the first step.
, 4 What is the role of the U.S. Securities and Exchange Commission (SEC) in financial
reporting?
A Regulates U.S. stock exchanges and seeks to create a fair information environment
for investors
B Sets accounting standards for all public companies
C Audits all public companies
D Establishes tax rates for corporations
Why A is correct: The SEC regulates U.S. stock exchanges and seeks to create a fair
information environment where investors can buy and sell stocks.
B — The SEC has legal authority to establish standards but currently accepts FASB
pronouncements.
C — External auditors audit companies, not the SEC.
D — The IRS establishes tax rates.
5 The Securities Act of 1933 requires:
A Companies planning to issue new debt or stock securities to the public to submit a
registration statement
B Companies to file annual reports with audited financial statements
C Companies to establish internal controls
D Companies to hire external auditors
Why A is correct: The Securities Act of 1933 requires most companies planning to issue
new debt or stock securities to the public to submit a registration statement to the SEC for
approval.
B — This is from the Securities Act of 1934 (Form 10-K).
C — This came from SOX.
D — This is not from the 1933 Act.
WGU C213 Final Exam
Practice Question Bank
Accounting for Decision Makers — NCLEX-Style Practice Questions with
Rationales
Comprehensive Review: Financial Statements, Cost Accounting, Cash Flows &
More
Edition 1 · July 2026
Table of Contents
1. Instructions for Use 2
2. Practice Questions with Answers & Rationales 2
WGU C213 · Western Governors University Page 1
,WGU C213 FINAL EXAM PRACTICE GUIDE INSTRUCTIONS & PRACTICE QUESTIONS
How to Use This Guide
Read each stem, choose your answer, then check the rationale directly below it. The correct
option is marked, and each wrong option is explained so you understand why it's wrong — not
just that it is.
Category: Accounting for Decision Makers — Comprehensive Final Review
1 What is the order of assets listed on the balance sheet?
A Assets are listed in the order of liquidity — cash, marketable investments, accounts
receivable, inventory, long-term investments, fixed assets, and intangibles
B Assets are listed alphabetically
C Assets are listed by dollar amount, largest to smallest
D Assets are listed in order of acquisition date
Why A is correct: Assets are listed in order of liquidity, with cash first followed by
marketable investments, accounts receivable, inventory, long-term investments, fixed assets,
and intangibles.
B — Alphabetical order is not used for balance sheet presentation.
C — Dollar amount ordering is not the standard.
D — Acquisition date is not the ordering method.
,2 What is the difference between a manufacturing company and a service company
in terms of costs?
A Service companies have higher selling costs
B A manufacturing company has direct materials (inventory) while a service company
does not
C Manufacturing companies have no period costs
D Service companies have manufacturing overhead
Why B is correct: The only difference is that a manufacturing company has direct materials
(inventory); service companies do not.
A — Both types of companies have selling costs.
C — Manufacturing companies have period costs too.
D — Service companies do not have manufacturing overhead.
3 When evaluating a historical income statement to project a future income statement,
what is the first step?
A Convert the income statement into a common-sized income statement
B Multiply sales by the growth rate
C Calculate net income for the projected year
D Determine the tax rate
Why A is correct: The first step is to convert the income statement into a common-sized
income statement, then multiply projected sales by the percentages.
B — This is done after converting to common-sized percentages.
C — Net income is calculated after projecting all line items.
D — Tax rate determination is part of the process but not the first step.
, 4 What is the role of the U.S. Securities and Exchange Commission (SEC) in financial
reporting?
A Regulates U.S. stock exchanges and seeks to create a fair information environment
for investors
B Sets accounting standards for all public companies
C Audits all public companies
D Establishes tax rates for corporations
Why A is correct: The SEC regulates U.S. stock exchanges and seeks to create a fair
information environment where investors can buy and sell stocks.
B — The SEC has legal authority to establish standards but currently accepts FASB
pronouncements.
C — External auditors audit companies, not the SEC.
D — The IRS establishes tax rates.
5 The Securities Act of 1933 requires:
A Companies planning to issue new debt or stock securities to the public to submit a
registration statement
B Companies to file annual reports with audited financial statements
C Companies to establish internal controls
D Companies to hire external auditors
Why A is correct: The Securities Act of 1933 requires most companies planning to issue
new debt or stock securities to the public to submit a registration statement to the SEC for
approval.
B — This is from the Securities Act of 1934 (Form 10-K).
C — This came from SOX.
D — This is not from the 1933 Act.
