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