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WGU C213 FINAL EXAM –
ACCOUNTING FOR DECISION
MAKERS (2025/2026) – 60
QUESTIONS AND VERIFIED
ANSWERS
Below is a set of 60 realistic multiple-choice questions for the WGU C213 Final Exam –
Accounting for Decision Makers (2025/2026). The questions cover balance sheets, income
statements, cash flow statements, managerial vs. financial accounting, cost behavior, and
budgeting, aligned with the course competencies and the latest WGU curriculum. Each question
includes one correct answer in blue and a detailed, professional explanation based on Generally
Accepted Accounting Principles (GAAP) and Financial Accounting Standards Board (FASB)
guidelines.
Question 1
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. Balance Sheet
Explanation: The balance sheet reports a company’s assets, liabilities, and owners’ equity at a
specific point in time, providing a snapshot of its financial position. The income statement covers
a period of time, the statement of cash flows tracks cash movements, and the statement of
retained earnings focuses on changes in retained earnings.
Question 2
What is the primary purpose of managerial accounting?
A. To provide financial reports for external stakeholders
B. To assist internal managers in planning and decision-making
, 2
C. To ensure compliance with tax regulations
D. To audit financial statements
Correct Answer: B. To assist internal managers in planning and decision-making
Explanation: Managerial accounting focuses on providing internal users, such as managers, with
information for planning, controlling, and evaluating operations. Financial accounting, in
contrast, is primarily for external stakeholders like investors and creditors.
Question 3
A company has total assets of $500,000, total liabilities of $200,000, and retained earnings of
$150,000. What is the amount of capital stock?
A. $150,000
B. $150,000
C. $300,000
D. $350,000
Correct Answer: B. $150,000
Explanation: The balance sheet equation is Assets = Liabilities + Owners’ Equity. Owners’
Equity includes capital stock and retained earnings. Given Assets ($500,000) = Liabilities
($200,000) + Owners’ Equity ($300,000), and Retained Earnings = $150,000, Capital Stock =
$300,000 - $150,000 = $150,000.
Question 4
Which of the following is NOT a component of the income statement?
A. Revenues
B. Expenses
C. Accounts Payable
D. Net Income
Correct Answer: C. Accounts Payable
Explanation: The income statement reports revenues, expenses, and net income over a period of
time. Accounts payable is a liability reported on the balance sheet, not the income statement.
Question 5
Which cash flow category includes cash received from issuing stock?
A. Operating Activities
, 3
B. Investing Activities
C. Financing Activities
D. Non-Cash Activities
Correct Answer: C. Financing Activities
Explanation: Financing activities on the statement of cash flows include transactions related to
obtaining or repaying capital, such as issuing stock or paying dividends. Operating activities
involve day-to-day operations, and investing activities involve asset purchases or sales.
Question 6
In cost-volume-profit (CVP) analysis, what is the break-even point?
A. The point where total costs equal total revenue
B. The point where fixed costs are zero
C. The point where variable costs exceed revenue
D. The point where net income is maximized
Correct Answer: A. The point where total costs equal total revenue
Explanation: The break-even point in CVP analysis occurs when total revenue equals total costs
(fixed plus variable), resulting in zero profit or loss. This is a key concept for understanding cost
behavior and profitability.
Question 7
Which of the following represents a period cost for a manufacturing company?
A. Direct Materials
B. Administrative Salaries
C. Manufacturing Overhead
D. Direct Labor
Correct Answer: B. Administrative Salaries
Explanation: Period costs are expensed immediately on the income statement and are not tied to
production, such as administrative salaries. Product costs (direct materials, direct labor,
manufacturing overhead) are inventoried and expensed as cost of goods sold.
Question 8
A company’s statement of cash flows shows operating cash inflows of $400,000, investing cash
outflows of $150,000, and financing cash outflows of $100,000. If the beginning cash balance
WGU C213 FINAL EXAM –
ACCOUNTING FOR DECISION
MAKERS (2025/2026) – 60
QUESTIONS AND VERIFIED
ANSWERS
Below is a set of 60 realistic multiple-choice questions for the WGU C213 Final Exam –
Accounting for Decision Makers (2025/2026). The questions cover balance sheets, income
statements, cash flow statements, managerial vs. financial accounting, cost behavior, and
budgeting, aligned with the course competencies and the latest WGU curriculum. Each question
includes one correct answer in blue and a detailed, professional explanation based on Generally
Accepted Accounting Principles (GAAP) and Financial Accounting Standards Board (FASB)
guidelines.
Question 1
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. Balance Sheet
Explanation: The balance sheet reports a company’s assets, liabilities, and owners’ equity at a
specific point in time, providing a snapshot of its financial position. The income statement covers
a period of time, the statement of cash flows tracks cash movements, and the statement of
retained earnings focuses on changes in retained earnings.
Question 2
What is the primary purpose of managerial accounting?
A. To provide financial reports for external stakeholders
B. To assist internal managers in planning and decision-making
, 2
C. To ensure compliance with tax regulations
D. To audit financial statements
Correct Answer: B. To assist internal managers in planning and decision-making
Explanation: Managerial accounting focuses on providing internal users, such as managers, with
information for planning, controlling, and evaluating operations. Financial accounting, in
contrast, is primarily for external stakeholders like investors and creditors.
Question 3
A company has total assets of $500,000, total liabilities of $200,000, and retained earnings of
$150,000. What is the amount of capital stock?
A. $150,000
B. $150,000
C. $300,000
D. $350,000
Correct Answer: B. $150,000
Explanation: The balance sheet equation is Assets = Liabilities + Owners’ Equity. Owners’
Equity includes capital stock and retained earnings. Given Assets ($500,000) = Liabilities
($200,000) + Owners’ Equity ($300,000), and Retained Earnings = $150,000, Capital Stock =
$300,000 - $150,000 = $150,000.
Question 4
Which of the following is NOT a component of the income statement?
A. Revenues
B. Expenses
C. Accounts Payable
D. Net Income
Correct Answer: C. Accounts Payable
Explanation: The income statement reports revenues, expenses, and net income over a period of
time. Accounts payable is a liability reported on the balance sheet, not the income statement.
Question 5
Which cash flow category includes cash received from issuing stock?
A. Operating Activities
, 3
B. Investing Activities
C. Financing Activities
D. Non-Cash Activities
Correct Answer: C. Financing Activities
Explanation: Financing activities on the statement of cash flows include transactions related to
obtaining or repaying capital, such as issuing stock or paying dividends. Operating activities
involve day-to-day operations, and investing activities involve asset purchases or sales.
Question 6
In cost-volume-profit (CVP) analysis, what is the break-even point?
A. The point where total costs equal total revenue
B. The point where fixed costs are zero
C. The point where variable costs exceed revenue
D. The point where net income is maximized
Correct Answer: A. The point where total costs equal total revenue
Explanation: The break-even point in CVP analysis occurs when total revenue equals total costs
(fixed plus variable), resulting in zero profit or loss. This is a key concept for understanding cost
behavior and profitability.
Question 7
Which of the following represents a period cost for a manufacturing company?
A. Direct Materials
B. Administrative Salaries
C. Manufacturing Overhead
D. Direct Labor
Correct Answer: B. Administrative Salaries
Explanation: Period costs are expensed immediately on the income statement and are not tied to
production, such as administrative salaries. Product costs (direct materials, direct labor,
manufacturing overhead) are inventoried and expensed as cost of goods sold.
Question 8
A company’s statement of cash flows shows operating cash inflows of $400,000, investing cash
outflows of $150,000, and financing cash outflows of $100,000. If the beginning cash balance
