WGU C213 EXAM 2024 ACTUAL
EXAM 2 VERSIONS (VERSION A AND
B) COMPLETE 200 QUESTIONS WITH
DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) /ALREADY
GRADED A+
"Analyze a statement of cash flows to identify operating, investing, and financing activities.
Operating Activities: - CORRECT ANSWER=> All categories that are on the income statement, and all
current assets and liabilities. i.e. sales (cash received from customers); cost of goods sold (cash paid for
inventory); operating expenses (cash paid for rent);"
"Analyze a statement of cash flows to identify operating, investing, and financing activities.
Investing Activities: - CORRECT ANSWER=> Balance sheet accounts: Long-term assets. i.e. property,
plant, and equipment; investments i.e. cash paid for equipment, cash paid for investments (stock, loans)"
"Analyze a statement of cash flows to identify operating, investing, and financing activities.
Financing Activities: - CORRECT ANSWER=> Balance sheet accounts i.e. Long-term liabilities and equity
accounts i.e. mortgage payable; common stock and additional-paid-in capital (cash received from
stockholders); retained earnings (cash paid for dividends)"
"Explain Accrual Accounting
Revenue recognition: - CORRECT ANSWER=> In order for revenue to be recognized in an accrual
system, two criterial must be met:
The promised work must be done before the revenue is recognized.
Cash collection must be reasonable assured before revenue is recognized."
"Explain Accrual Accounting
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,Expense recognition: - CORRECT ANSWER=> Expenses are matched to the revenue that is generated
from the expense.
Direct matching, as with cost of goods sold (COGS)
However, some expenses are extremely difficult to match with specific revenue, and are more aligned to
a specific time period.
Systematic allocation, as with deprecation
Moreover, some expenses are difficult to match with specific revenue or specific time periods.
Immediate recognition, as with advertising"
"Variable Costs: - CORRECT ANSWER=> A cost that changes directly with changes in the level of sales
or production.
Examples are direct materials costs and sales commission."
"Fixed Costs: - CORRECT ANSWER=> A cost that doesn't change based on changes in the level of sales
or production. Examples are building rent and executive salaries."
"Product Costs: - CORRECT ANSWER=> A cost incurred as part of the production process.
These costs are first reported as an asset (inventory) and then as an expense (cost of goods sold) when
the product is sold."
"Period Costs: - CORRECT ANSWER=> A cost incurred outside the factory or production facility.
These costs are reported as an expense in the period in which they are incurred."
"Direct Materials: - CORRECT ANSWER=> The cost of the primary raw materials used in production. In
producing French fries, the direct materials cost is the cost of the potatoes."
"Indirect Materials: - CORRECT ANSWER=> Materials that are necessary to a manufacturing or service
business but are not directly included in or are not a significant part of the actual product."
"Direct Labor: - CORRECT ANSWER=> The cost of the wages of the workers who are assembling the
direct materials into the finished product. In producing an automobile, the direct labor cost is the
compensation cost of the auto workers on the assembly line."
"Indirect Labor: - CORRECT ANSWER=> Labor that is necessary to a manufacturing or service business
but is not directly related to the actual production of the product."
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,"Manufacturing Overhead: - CORRECT ANSWER=> All factory costs that are not direct materials or
direct labor. Examples are factory supervisor salaries, factory building depreciation, and miscellaneous
indirect materials such as glue or screws."
"Direct Costs: - CORRECT ANSWER=> The costs that are created by a particular product or segment
that is being analyzed. If a product or segment is dropped, the direct costs created by that product or
segment will disappear."
"Indirect Costs: - CORRECT ANSWER=> The costs that are assigned to a particular product or segment
but that are not actually caused by that product or segment. If a product or segment is dropped, the
indirect costs assigned to that product or segment will remain."
"Differential Costs: - CORRECT ANSWER=> A future cost that can be changed by a decision made now.
An example is monthly rent for an apartment."
"Sunk Costs: - CORRECT ANSWER=> A past cost that cannot be changed by any decision made now. An
example would be last month's paid rent."
"Out-of-Pocket Costs: - CORRECT ANSWER=> Costs that involve the outlay of cash or the use of some
other asset (like equipment)."
"Opportunity Costs: - CORRECT ANSWER=> The benefits not received because of actions NOT taken.
For example, the opportunity cost of going to a basketball game is the increased points that you could
have received on the next day's accounting exam if you had spent that time studying."
"Calculate the cost of a product
Product costs = Direct labor + Direct Materials + Factory Overhead
Factory overhead = Indirect labor + Indirect materials + "Factory expenses"
Can you calculate the product costs for September? - CORRECT ANSWER=> Factory overhead = 5,000 +
3,000 + 7,000 + 8,000 = 23,000
Total product costs = 20,000 + 25,000 + 23,000 = 68,000
Total non-product costs = 2,000 + 5,000 = 7,000"
"Identify overhead cost activities - CORRECT ANSWER=> "
"Describe the purpose of accounting. - CORRECT ANSWER=> Accounting is the recording of the day-to-
day financial activities of a company and the organization of that information into summary reports used
to evaluate the company's financial status.
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, Bookkeeping is a part of accounting. Bookkeeping refers to the process of recording transactions into
various accounts, which is the first step in accounting. The next step is to analyze the accounts and
organize them into financial statements and other useful reports."
"Describe the three financial statements. - CORRECT ANSWER=> The balance sheet reports a
company's assets, liabilities, and owners' equity. It reports the financial position of a firm at a point in
time.
The income statement reports the amount of net income earned by a company during a period. Net
income is the excess of a company's revenues over its expenses. It reports the financial performance of a
firm over a period of time.
The statement of cash flows reports the amount of cash collected and paid out by a company in the
following three types of activities: operating, investing, and financing over a period of time."
"Lenders - CORRECT ANSWER=> Banks use companies' financial statements in making decisions about
commercial loans. The financial statements are useful because they help the lender predict the future
ability of the borrower to repay the loan."
"Investors - CORRECT ANSWER=> Investors want information to help them estimate how much cash
they can expect to directly receive from the business in the future if they invest in it now."
"Company Management - CORRECT ANSWER=> Managers use financial accounting data to formulate
company goals, to compute bonuses for employees, and to illuminate company weaknesses."
"Suppliers and Customers - CORRECT ANSWER=> Suppliers, customers, and employees use financial
statements to tell them about the long-run prospects of a company."
"Employees - CORRECT ANSWER=> Financial statement data, as mentioned earlier, are used in
determining employee bonuses. In addition, financial accounting information can help an employee
evaluate the employer's ability to fulfill its long-run promises, such as for pensions and retiree health
care benefits. Financial statements are also important in contract negotiations between labor and
management."
"Competitors - CORRECT ANSWER=> Competitors use financial accounting information to reveal
strategic opportunities within their industry."
"Government Agencies - CORRECT ANSWER=> Government agencies use financial statement data to
bolster political and regulatory positions for and against companies."
"Politicians - CORRECT ANSWER=> Politicians use financial statement data to bolster political and
regulatory positions for and against companies."
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EXAM 2 VERSIONS (VERSION A AND
B) COMPLETE 200 QUESTIONS WITH
DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) /ALREADY
GRADED A+
"Analyze a statement of cash flows to identify operating, investing, and financing activities.
Operating Activities: - CORRECT ANSWER=> All categories that are on the income statement, and all
current assets and liabilities. i.e. sales (cash received from customers); cost of goods sold (cash paid for
inventory); operating expenses (cash paid for rent);"
"Analyze a statement of cash flows to identify operating, investing, and financing activities.
Investing Activities: - CORRECT ANSWER=> Balance sheet accounts: Long-term assets. i.e. property,
plant, and equipment; investments i.e. cash paid for equipment, cash paid for investments (stock, loans)"
"Analyze a statement of cash flows to identify operating, investing, and financing activities.
Financing Activities: - CORRECT ANSWER=> Balance sheet accounts i.e. Long-term liabilities and equity
accounts i.e. mortgage payable; common stock and additional-paid-in capital (cash received from
stockholders); retained earnings (cash paid for dividends)"
"Explain Accrual Accounting
Revenue recognition: - CORRECT ANSWER=> In order for revenue to be recognized in an accrual
system, two criterial must be met:
The promised work must be done before the revenue is recognized.
Cash collection must be reasonable assured before revenue is recognized."
"Explain Accrual Accounting
Page | 1
,Expense recognition: - CORRECT ANSWER=> Expenses are matched to the revenue that is generated
from the expense.
Direct matching, as with cost of goods sold (COGS)
However, some expenses are extremely difficult to match with specific revenue, and are more aligned to
a specific time period.
Systematic allocation, as with deprecation
Moreover, some expenses are difficult to match with specific revenue or specific time periods.
Immediate recognition, as with advertising"
"Variable Costs: - CORRECT ANSWER=> A cost that changes directly with changes in the level of sales
or production.
Examples are direct materials costs and sales commission."
"Fixed Costs: - CORRECT ANSWER=> A cost that doesn't change based on changes in the level of sales
or production. Examples are building rent and executive salaries."
"Product Costs: - CORRECT ANSWER=> A cost incurred as part of the production process.
These costs are first reported as an asset (inventory) and then as an expense (cost of goods sold) when
the product is sold."
"Period Costs: - CORRECT ANSWER=> A cost incurred outside the factory or production facility.
These costs are reported as an expense in the period in which they are incurred."
"Direct Materials: - CORRECT ANSWER=> The cost of the primary raw materials used in production. In
producing French fries, the direct materials cost is the cost of the potatoes."
"Indirect Materials: - CORRECT ANSWER=> Materials that are necessary to a manufacturing or service
business but are not directly included in or are not a significant part of the actual product."
"Direct Labor: - CORRECT ANSWER=> The cost of the wages of the workers who are assembling the
direct materials into the finished product. In producing an automobile, the direct labor cost is the
compensation cost of the auto workers on the assembly line."
"Indirect Labor: - CORRECT ANSWER=> Labor that is necessary to a manufacturing or service business
but is not directly related to the actual production of the product."
Page | 2
,"Manufacturing Overhead: - CORRECT ANSWER=> All factory costs that are not direct materials or
direct labor. Examples are factory supervisor salaries, factory building depreciation, and miscellaneous
indirect materials such as glue or screws."
"Direct Costs: - CORRECT ANSWER=> The costs that are created by a particular product or segment
that is being analyzed. If a product or segment is dropped, the direct costs created by that product or
segment will disappear."
"Indirect Costs: - CORRECT ANSWER=> The costs that are assigned to a particular product or segment
but that are not actually caused by that product or segment. If a product or segment is dropped, the
indirect costs assigned to that product or segment will remain."
"Differential Costs: - CORRECT ANSWER=> A future cost that can be changed by a decision made now.
An example is monthly rent for an apartment."
"Sunk Costs: - CORRECT ANSWER=> A past cost that cannot be changed by any decision made now. An
example would be last month's paid rent."
"Out-of-Pocket Costs: - CORRECT ANSWER=> Costs that involve the outlay of cash or the use of some
other asset (like equipment)."
"Opportunity Costs: - CORRECT ANSWER=> The benefits not received because of actions NOT taken.
For example, the opportunity cost of going to a basketball game is the increased points that you could
have received on the next day's accounting exam if you had spent that time studying."
"Calculate the cost of a product
Product costs = Direct labor + Direct Materials + Factory Overhead
Factory overhead = Indirect labor + Indirect materials + "Factory expenses"
Can you calculate the product costs for September? - CORRECT ANSWER=> Factory overhead = 5,000 +
3,000 + 7,000 + 8,000 = 23,000
Total product costs = 20,000 + 25,000 + 23,000 = 68,000
Total non-product costs = 2,000 + 5,000 = 7,000"
"Identify overhead cost activities - CORRECT ANSWER=> "
"Describe the purpose of accounting. - CORRECT ANSWER=> Accounting is the recording of the day-to-
day financial activities of a company and the organization of that information into summary reports used
to evaluate the company's financial status.
Page | 3
, Bookkeeping is a part of accounting. Bookkeeping refers to the process of recording transactions into
various accounts, which is the first step in accounting. The next step is to analyze the accounts and
organize them into financial statements and other useful reports."
"Describe the three financial statements. - CORRECT ANSWER=> The balance sheet reports a
company's assets, liabilities, and owners' equity. It reports the financial position of a firm at a point in
time.
The income statement reports the amount of net income earned by a company during a period. Net
income is the excess of a company's revenues over its expenses. It reports the financial performance of a
firm over a period of time.
The statement of cash flows reports the amount of cash collected and paid out by a company in the
following three types of activities: operating, investing, and financing over a period of time."
"Lenders - CORRECT ANSWER=> Banks use companies' financial statements in making decisions about
commercial loans. The financial statements are useful because they help the lender predict the future
ability of the borrower to repay the loan."
"Investors - CORRECT ANSWER=> Investors want information to help them estimate how much cash
they can expect to directly receive from the business in the future if they invest in it now."
"Company Management - CORRECT ANSWER=> Managers use financial accounting data to formulate
company goals, to compute bonuses for employees, and to illuminate company weaknesses."
"Suppliers and Customers - CORRECT ANSWER=> Suppliers, customers, and employees use financial
statements to tell them about the long-run prospects of a company."
"Employees - CORRECT ANSWER=> Financial statement data, as mentioned earlier, are used in
determining employee bonuses. In addition, financial accounting information can help an employee
evaluate the employer's ability to fulfill its long-run promises, such as for pensions and retiree health
care benefits. Financial statements are also important in contract negotiations between labor and
management."
"Competitors - CORRECT ANSWER=> Competitors use financial accounting information to reveal
strategic opportunities within their industry."
"Government Agencies - CORRECT ANSWER=> Government agencies use financial statement data to
bolster political and regulatory positions for and against companies."
"Politicians - CORRECT ANSWER=> Politicians use financial statement data to bolster political and
regulatory positions for and against companies."
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