WGU C213 PA / OA Study Guide Exam
2026 Questions and Answers
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? - Correct answer-The Public
Company Accounting Oversight Board (PACOB)
What two items of information are revealed on the balance sheet? - Correct
answer-Ownership and Debt
Information that can be verified - Correct answer-Reliable
Information having to do with the matter at hand - Correct answer-Relevant
Information that is important enough to make a difference - Correct answer-
Material
Information related to recognizing losses as they occur - Correct answer-
Conservatism
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,What is known about the direct and indirect methods of preparing statements of
cash flow? - Correct answer-The indirect method is more popular among large U.S.
companies
Which actions do internal auditors perform to assist in maintaining the integrity of
financial statements? - Correct answer-They search for and investigate fraud.
&
They review financial records and internal controls.
What is a significant role of the U.S. Securities and Exchange Commission (SEC)
in financial reporting? - Correct answer-They ensure that financial statement users
are provided with reliable information to use in decision making
What is a cost that will change in the future based upon the decision made? -
Correct answer-Differential cost
Which are examples are period costs? - Correct answer-Administrative expenses &
Selling expenses
A company manufactures custom-built wooden bookshelves.
Which two costs would the company classify as period costs?
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, Answer Choices: Wood cost, Salary cost of the craftsperson, Salary cost of the
receptionist, Advertising cost - Correct answer-Salary cost of the receptionist
Advertising cost
Which two costs are included when calculating inventory costs? - Correct answer-
Direct labor costs
Overhead costs
In which scenario would activity-based costing be more appropriate than
traditional costing? - Correct answer-A company produces five different products.
The products are highly differentiated and have significantly different demands for
their use of overhead costs.
Which category of ABC activities are machine setup and material movement costs
associated with? - Correct answer-Batch-level activities
Company A calculated the following information under traditional and activity-
based costing for the production and sale of 1,000 units of Product B:
Traditional ABC
Sales $100,000 $100,000
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2026 Questions and Answers
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? - Correct answer-The Public
Company Accounting Oversight Board (PACOB)
What two items of information are revealed on the balance sheet? - Correct
answer-Ownership and Debt
Information that can be verified - Correct answer-Reliable
Information having to do with the matter at hand - Correct answer-Relevant
Information that is important enough to make a difference - Correct answer-
Material
Information related to recognizing losses as they occur - Correct answer-
Conservatism
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,What is known about the direct and indirect methods of preparing statements of
cash flow? - Correct answer-The indirect method is more popular among large U.S.
companies
Which actions do internal auditors perform to assist in maintaining the integrity of
financial statements? - Correct answer-They search for and investigate fraud.
&
They review financial records and internal controls.
What is a significant role of the U.S. Securities and Exchange Commission (SEC)
in financial reporting? - Correct answer-They ensure that financial statement users
are provided with reliable information to use in decision making
What is a cost that will change in the future based upon the decision made? -
Correct answer-Differential cost
Which are examples are period costs? - Correct answer-Administrative expenses &
Selling expenses
A company manufactures custom-built wooden bookshelves.
Which two costs would the company classify as period costs?
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, Answer Choices: Wood cost, Salary cost of the craftsperson, Salary cost of the
receptionist, Advertising cost - Correct answer-Salary cost of the receptionist
Advertising cost
Which two costs are included when calculating inventory costs? - Correct answer-
Direct labor costs
Overhead costs
In which scenario would activity-based costing be more appropriate than
traditional costing? - Correct answer-A company produces five different products.
The products are highly differentiated and have significantly different demands for
their use of overhead costs.
Which category of ABC activities are machine setup and material movement costs
associated with? - Correct answer-Batch-level activities
Company A calculated the following information under traditional and activity-
based costing for the production and sale of 1,000 units of Product B:
Traditional ABC
Sales $100,000 $100,000
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
