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C213 ACCOUNTING FOR DECISION MAKERS-2
WGU 2025 QUESTIONS AND ANSWERS.
1. Under the general rule of revenue recognition, revenue is
recognized when? - correct answer - the earnings process is
complete, and a valid promise of payment has been received.
2. An example of direct matching of an expense with revenues
would be? - correct answer - direct labor costs incurred to
produce inventory sold during a period.
3. Which of the following categories of expenses is subject to
immediate recognition on the income statement? - correct
answer - The salary of the company president
4. Which of the following is NOT an acceptable basis for the
recognition of expenses? - correct answer - Cash disbursement
5. The revenue principle states that revenue should be
recognized at a point when - correct answer - an exchange
transaction involving goods and services has occurred and the
earnings process is essentially complete
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6. Analysis of revenue and expense transactions requires the use
of the: - correct answer - Expanded Accounting Equation
7. Thus far, the only national government to adopt the accrual
basis for its official accounting system is ______. - correct
answer - New Zealand
8. Accountants use what two criteria to determine when revenue
should be recognized? - correct answer - 1) The promised work
must be done before revenue is recognized.
2) Cash collection should be reasonably assured before
revenue is recognized.
9. Which of the following statements is true regarding retained
earnings?
Increasing revenues will increase retained earnings
Increasing expenses will decrease retained earnings
Increasing dividends will decrease retained earnings
All of the statements are true - correct answer - All of
the statements are true
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10. ______ is/are not considered to be an expense of doing
business. - correct answer - Cash dividends
11. The three methods used to determine when to recognize an
expense are: - correct answer - 1) Direct matching, as with cost
of goods sold
2) Systematic allocation, as with depreciation
3) Immediate recognition, as with advertising
12. ____ is increased and ____ is decreased when cash is
collected from customers who had previously purchased a
product or service on account. - correct answer - Cash,
Accounts Receivable
13. If you increase the volume of activity in our business, you
naturally have/need more - correct answer - Cash
Accounts Receivable
Inventory
Accounts Payable
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14. Most forecasting exercises begin with a forecast of? - correct
answer - sales
15. If a company anticipates a 40% increase in sales volume,
then it is most likely that the company will need about a 40%
increase in - correct answer - accounts payable
16. Activity-based Costing (ABC) - correct answer - A method of
attributing overhead costs to products based on measurable
factors that relate to activities that create overhead costs
17. Operating Income - correct answer - The performance of the
fundamental business operations conducted by a company
18. Consistency Principle - correct answer - The consistency
principle states that, once you adopt an accounting principle or
method, continue to follow it consistently in future accounting
periods.
C213 ACCOUNTING FOR DECISION MAKERS-2
WGU 2025 QUESTIONS AND ANSWERS.
1. Under the general rule of revenue recognition, revenue is
recognized when? - correct answer - the earnings process is
complete, and a valid promise of payment has been received.
2. An example of direct matching of an expense with revenues
would be? - correct answer - direct labor costs incurred to
produce inventory sold during a period.
3. Which of the following categories of expenses is subject to
immediate recognition on the income statement? - correct
answer - The salary of the company president
4. Which of the following is NOT an acceptable basis for the
recognition of expenses? - correct answer - Cash disbursement
5. The revenue principle states that revenue should be
recognized at a point when - correct answer - an exchange
transaction involving goods and services has occurred and the
earnings process is essentially complete
, Page | 2
6. Analysis of revenue and expense transactions requires the use
of the: - correct answer - Expanded Accounting Equation
7. Thus far, the only national government to adopt the accrual
basis for its official accounting system is ______. - correct
answer - New Zealand
8. Accountants use what two criteria to determine when revenue
should be recognized? - correct answer - 1) The promised work
must be done before revenue is recognized.
2) Cash collection should be reasonably assured before
revenue is recognized.
9. Which of the following statements is true regarding retained
earnings?
Increasing revenues will increase retained earnings
Increasing expenses will decrease retained earnings
Increasing dividends will decrease retained earnings
All of the statements are true - correct answer - All of
the statements are true
, Page | 3
10. ______ is/are not considered to be an expense of doing
business. - correct answer - Cash dividends
11. The three methods used to determine when to recognize an
expense are: - correct answer - 1) Direct matching, as with cost
of goods sold
2) Systematic allocation, as with depreciation
3) Immediate recognition, as with advertising
12. ____ is increased and ____ is decreased when cash is
collected from customers who had previously purchased a
product or service on account. - correct answer - Cash,
Accounts Receivable
13. If you increase the volume of activity in our business, you
naturally have/need more - correct answer - Cash
Accounts Receivable
Inventory
Accounts Payable
, Page | 4
14. Most forecasting exercises begin with a forecast of? - correct
answer - sales
15. If a company anticipates a 40% increase in sales volume,
then it is most likely that the company will need about a 40%
increase in - correct answer - accounts payable
16. Activity-based Costing (ABC) - correct answer - A method of
attributing overhead costs to products based on measurable
factors that relate to activities that create overhead costs
17. Operating Income - correct answer - The performance of the
fundamental business operations conducted by a company
18. Consistency Principle - correct answer - The consistency
principle states that, once you adopt an accounting principle or
method, continue to follow it consistently in future accounting
periods.
