C213 ACCOUNTING FOR DECISION MAKERS FINAL EXAM
2025/2026 ANSWERED WESTERN GOVERNORS
UNIVERSITY
Which category on the statement of cash flows summarizes cash receipts and payments to
owners and creditors of the company?
Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting policies?
In the notes to the financial statements
What does it mean if a company has a debt ratio of 101.5%?
The company has 1.5% more total liabilities that total assets
Which assurances does an external audit report provide for its readers?
The company's financial statements fairly reflects its financial position
What is consistent with a continual decline in gross profit if the firm's cost of goods sold
remains the same?
Continual decrease in sales
Which formula yields a cash time interest earned ratio of 11?
Cash before interest and taxes of $11,000/cash paid for interest of $1,000
What two items of information are revealed on the balance sheet?
Debt, Ownership
Which term is defined as the residual interest in the net assets of a company?
Owner's equity
A corporation has total liabilities of $300 million, total owner's equity of $100 million, and
current assets of $50 million. What is the value of the firm's long-term assets?
, $350 million
Which situation should result in revenue recognition on the income statement for the year
ending 12/31/14 if the firm is using accrual-basis accounting?
In 2014, a company provides services to a customer for which cash will be collected the next
year (2015)
Which form of debt should be reported in the long-term liability category?
Notes payable expected to be paid in 18 months
Which two values affect the measurement of net income?
Dividend paid, operating expenses
Which two items subtotals are included in a multi-step income statement?
gross profit, income from operations
A furniture company using accrual accounting purchased 20 sofas in November 2011, In
December 2011, 8 of the sofas were sold to customers. The customers all signed contracts
agreeing to pay half the amount owed in February 2012 and the remaining half in March
2012. At the time of sale, the company was reasonably sure the customers would pay the
amount owed.
In which month should advertising costs be expended?
November 2011
On May 1, 2011, a company using accural accounting purchased equipment costing $500,000.
It expects the equipment to have a useful life of five years. At the time of purchase, the
company also purchased a one-year insurance policy on this equipment, which cost $6,000.
How much insurance expense should the company have recognized of the year ending in
2011?
$4,000
What was the 2012 net profit amount if the 2013 pro-forma net profit of $187,000 was based
on a 22% increase?
$153,279
2025/2026 ANSWERED WESTERN GOVERNORS
UNIVERSITY
Which category on the statement of cash flows summarizes cash receipts and payments to
owners and creditors of the company?
Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting policies?
In the notes to the financial statements
What does it mean if a company has a debt ratio of 101.5%?
The company has 1.5% more total liabilities that total assets
Which assurances does an external audit report provide for its readers?
The company's financial statements fairly reflects its financial position
What is consistent with a continual decline in gross profit if the firm's cost of goods sold
remains the same?
Continual decrease in sales
Which formula yields a cash time interest earned ratio of 11?
Cash before interest and taxes of $11,000/cash paid for interest of $1,000
What two items of information are revealed on the balance sheet?
Debt, Ownership
Which term is defined as the residual interest in the net assets of a company?
Owner's equity
A corporation has total liabilities of $300 million, total owner's equity of $100 million, and
current assets of $50 million. What is the value of the firm's long-term assets?
, $350 million
Which situation should result in revenue recognition on the income statement for the year
ending 12/31/14 if the firm is using accrual-basis accounting?
In 2014, a company provides services to a customer for which cash will be collected the next
year (2015)
Which form of debt should be reported in the long-term liability category?
Notes payable expected to be paid in 18 months
Which two values affect the measurement of net income?
Dividend paid, operating expenses
Which two items subtotals are included in a multi-step income statement?
gross profit, income from operations
A furniture company using accrual accounting purchased 20 sofas in November 2011, In
December 2011, 8 of the sofas were sold to customers. The customers all signed contracts
agreeing to pay half the amount owed in February 2012 and the remaining half in March
2012. At the time of sale, the company was reasonably sure the customers would pay the
amount owed.
In which month should advertising costs be expended?
November 2011
On May 1, 2011, a company using accural accounting purchased equipment costing $500,000.
It expects the equipment to have a useful life of five years. At the time of purchase, the
company also purchased a one-year insurance policy on this equipment, which cost $6,000.
How much insurance expense should the company have recognized of the year ending in
2011?
$4,000
What was the 2012 net profit amount if the 2013 pro-forma net profit of $187,000 was based
on a 22% increase?
$153,279
