WGU C213 Accounting for Decision Makers
2024/2025 Final Exam – 100% Verified Questions and
Correct Answers
Below are 80 original multiple-choice questions designed to reflect the content of the WGU
C213 Accounting for Decision Makers Final Exam for the 2024/2025 academic year. Each
question includes four answer options, the correct answer, and a brief rationale explaining
the choice.
1. What is the primary purpose of financial accounting?
A. To assist managers in internal decision-making
B. To provide financial reports for external users
C. To track daily operational activities
D. To forecast future business performance
Correct Answer: B
Rationale: Financial accounting focuses on preparing financial statements for external
stakeholders, such as investors and creditors, to report a company’s financial perfor-
mance and position.
2. Which financial statement provides a snapshot of a company’s financial position at a
specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
Correct Answer: C
Rationale: The balance sheet shows assets, liabilities, and equity at a specific date,
providing a snapshot of financial position.
3. Which of the following is NOT one of the four general types of financial statement
notes?
1
, A. Summary of significant accounting policies
B. Additional information about summary totals
C. Supplementary information required by the IRS
D. Disclosure of information not recognized
Correct Answer: C
Rationale: Financial statement notes include accounting policies, additional details,
and unrecognized information, but IRS-required supplementary information is not a
standard category.
4. Which organization has the legal authority to establish accounting standards for pub-
licly held companies in the U.S.?
A. Financial Accounting Standards Board (FASB)
B. Securities and Exchange Commission (SEC)
C. Public Company Accounting Oversight Board (PCAOB)
D. International Accounting Standards Board (IASB)
Correct Answer: B
Rationale: The SEC has the ultimate legal authority to set accounting standards for
public companies, though it delegates much of this to the FASB.
5. What is the correct order of assets listed on a balance sheet?
A. Cash, Inventory, Accounts Receivable, Fixed Assets
B. Fixed Assets, Inventory, Accounts Receivable, Cash
C. Cash, Accounts Receivable, Inventory, Fixed Assets
D. Inventory, Cash, Fixed Assets, Accounts Receivable
Correct Answer: C
Rationale: Assets are listed in order of liquidity, starting with cash, followed by ac-
counts receivable, inventory, and then fixed assets.
6. Which of the following is an example of a significant accounting policy disclosed in
financial statement notes?
A. The company’s marketing strategy
B. The method used to estimate depreciation
C. The CEO’s compensation package
D. The company’s employee training program
Correct Answer: B
Rationale: Significant accounting policies, such as depreciation methods, are disclosed
in financial statement notes to explain how financial data is prepared.
2
, 7. If a company does NOT record accrued wages expense at year-end, how does this
affect the financial statements?
A. Overstates liabilities and net income
B. Understates liabilities and overstates net income
C. Overstates assets and net income
D. Understates assets and liabilities
Correct Answer: B
Rationale: Failing to record accrued wages understates liabilities (unrecorded wages
payable) and overstates net income (unrecorded expense).
8. Which of the following is an investing activity on the statement of cash flows?
A. Payment of dividends
B. Issuance of common stock
C. Purchase of equipment
D. Payment of interest on a loan
Correct Answer: C
Rationale: Investing activities involve the acquisition or sale of long-term assets, such
as equipment.
9. What is the accounting equation?
A. Assets = Liabilities + Revenue
B. Assets = Liabilities + Equity
C. Liabilities = Assets + Equity
D. Equity = Assets + Liabilities
Correct Answer: B
Rationale: The accounting equation, Assets = Liabilities + Equity, is the foundation
of double-entry accounting.
10. Which of the following best defines accrual basis accounting?
A. Revenues and expenses are recorded when cash is received or paid
B. Revenues are recorded when earned, and expenses when incurred
C. Revenues are recorded when contracts are signed
D. Expenses are recorded only when paid
3
2024/2025 Final Exam – 100% Verified Questions and
Correct Answers
Below are 80 original multiple-choice questions designed to reflect the content of the WGU
C213 Accounting for Decision Makers Final Exam for the 2024/2025 academic year. Each
question includes four answer options, the correct answer, and a brief rationale explaining
the choice.
1. What is the primary purpose of financial accounting?
A. To assist managers in internal decision-making
B. To provide financial reports for external users
C. To track daily operational activities
D. To forecast future business performance
Correct Answer: B
Rationale: Financial accounting focuses on preparing financial statements for external
stakeholders, such as investors and creditors, to report a company’s financial perfor-
mance and position.
2. Which financial statement provides a snapshot of a company’s financial position at a
specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
Correct Answer: C
Rationale: The balance sheet shows assets, liabilities, and equity at a specific date,
providing a snapshot of financial position.
3. Which of the following is NOT one of the four general types of financial statement
notes?
1
, A. Summary of significant accounting policies
B. Additional information about summary totals
C. Supplementary information required by the IRS
D. Disclosure of information not recognized
Correct Answer: C
Rationale: Financial statement notes include accounting policies, additional details,
and unrecognized information, but IRS-required supplementary information is not a
standard category.
4. Which organization has the legal authority to establish accounting standards for pub-
licly held companies in the U.S.?
A. Financial Accounting Standards Board (FASB)
B. Securities and Exchange Commission (SEC)
C. Public Company Accounting Oversight Board (PCAOB)
D. International Accounting Standards Board (IASB)
Correct Answer: B
Rationale: The SEC has the ultimate legal authority to set accounting standards for
public companies, though it delegates much of this to the FASB.
5. What is the correct order of assets listed on a balance sheet?
A. Cash, Inventory, Accounts Receivable, Fixed Assets
B. Fixed Assets, Inventory, Accounts Receivable, Cash
C. Cash, Accounts Receivable, Inventory, Fixed Assets
D. Inventory, Cash, Fixed Assets, Accounts Receivable
Correct Answer: C
Rationale: Assets are listed in order of liquidity, starting with cash, followed by ac-
counts receivable, inventory, and then fixed assets.
6. Which of the following is an example of a significant accounting policy disclosed in
financial statement notes?
A. The company’s marketing strategy
B. The method used to estimate depreciation
C. The CEO’s compensation package
D. The company’s employee training program
Correct Answer: B
Rationale: Significant accounting policies, such as depreciation methods, are disclosed
in financial statement notes to explain how financial data is prepared.
2
, 7. If a company does NOT record accrued wages expense at year-end, how does this
affect the financial statements?
A. Overstates liabilities and net income
B. Understates liabilities and overstates net income
C. Overstates assets and net income
D. Understates assets and liabilities
Correct Answer: B
Rationale: Failing to record accrued wages understates liabilities (unrecorded wages
payable) and overstates net income (unrecorded expense).
8. Which of the following is an investing activity on the statement of cash flows?
A. Payment of dividends
B. Issuance of common stock
C. Purchase of equipment
D. Payment of interest on a loan
Correct Answer: C
Rationale: Investing activities involve the acquisition or sale of long-term assets, such
as equipment.
9. What is the accounting equation?
A. Assets = Liabilities + Revenue
B. Assets = Liabilities + Equity
C. Liabilities = Assets + Equity
D. Equity = Assets + Liabilities
Correct Answer: B
Rationale: The accounting equation, Assets = Liabilities + Equity, is the foundation
of double-entry accounting.
10. Which of the following best defines accrual basis accounting?
A. Revenues and expenses are recorded when cash is received or paid
B. Revenues are recorded when earned, and expenses when incurred
C. Revenues are recorded when contracts are signed
D. Expenses are recorded only when paid
3
