WGU C213 PRE –Assessment PA &
Objective Assessment OA Study Guide
(Latest Update ) Questions &
Answers 100% Correct - (Grade A)
Which item is an investing activity? - correct answer Cash payments for purchase of
plant assets
What impact does the sale of equipment have on the statement of cash flows? -
correct answer Increase in cash from investing activities
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 internal control is intended to ensure that a company does not mistakenly pay
a supplier for an invoice that includes more items than were actually received? -
correct answer The inventory department counts and inspects items as received and
forwards the receiving record to accounts payable.
What are common reasons for managers to manipulate reported earnings? - correct
answer Pressure to meet internal sales goals &
Preparing to qualify for a bank loan
Which requirements must accounting firms that audit public companies meet under
the Sarbanes-Oxley Act? - correct answer Firms must not provide certain non-audit
services to audit clients, such as management functions or legal services. &
,Firms must report to and be retained by the audit committee rather than the CFO or
other company management.
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 does management accounting provide? - correct answer A better insight for
management so a business can perform more effectively
&
A competitive edge to a business by providing its managers with the detailed data
needed to make decisions
How does management accounting differ from financial accounting? - correct answer
Management accounting is used primarily for internal planning, control, and
evaluation.
Which account is seen on the balance sheet of a manufacturing company but not on
the balance sheet of a service-oriented company? - correct answer Inventory
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?
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
What role do ethical standards have in management accounting? - correct answer To
guide the resolution to possible ethical dilemmas that the managerial accountant
may encounter
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
, The director of a marathon race wants to assign the cost of having police officers
along the race route to manage crowd control.
Which consideration is an appropriate cost driver? - correct answer The number of
race participants and spectators
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
Cost of goods sold $70,000 $110,000
Gross margin $30,000 ($10,000)
Which decision should be made about the selling price of Product B? - correct answer
The price of Product B should be increased.
Which two concepts are studied in cost-volume-profit analysis? - correct answer
Profits
Cash
What are two impacts on costs as sales volume increases? - correct answer Total fixed
costs will stay the same.
Fixed costs per unit will decrease.
A company is experiencing an increase in their bad debt expense.
Objective Assessment OA Study Guide
(Latest Update ) Questions &
Answers 100% Correct - (Grade A)
Which item is an investing activity? - correct answer Cash payments for purchase of
plant assets
What impact does the sale of equipment have on the statement of cash flows? -
correct answer Increase in cash from investing activities
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 internal control is intended to ensure that a company does not mistakenly pay
a supplier for an invoice that includes more items than were actually received? -
correct answer The inventory department counts and inspects items as received and
forwards the receiving record to accounts payable.
What are common reasons for managers to manipulate reported earnings? - correct
answer Pressure to meet internal sales goals &
Preparing to qualify for a bank loan
Which requirements must accounting firms that audit public companies meet under
the Sarbanes-Oxley Act? - correct answer Firms must not provide certain non-audit
services to audit clients, such as management functions or legal services. &
,Firms must report to and be retained by the audit committee rather than the CFO or
other company management.
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 does management accounting provide? - correct answer A better insight for
management so a business can perform more effectively
&
A competitive edge to a business by providing its managers with the detailed data
needed to make decisions
How does management accounting differ from financial accounting? - correct answer
Management accounting is used primarily for internal planning, control, and
evaluation.
Which account is seen on the balance sheet of a manufacturing company but not on
the balance sheet of a service-oriented company? - correct answer Inventory
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?
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
What role do ethical standards have in management accounting? - correct answer To
guide the resolution to possible ethical dilemmas that the managerial accountant
may encounter
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
, The director of a marathon race wants to assign the cost of having police officers
along the race route to manage crowd control.
Which consideration is an appropriate cost driver? - correct answer The number of
race participants and spectators
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
Cost of goods sold $70,000 $110,000
Gross margin $30,000 ($10,000)
Which decision should be made about the selling price of Product B? - correct answer
The price of Product B should be increased.
Which two concepts are studied in cost-volume-profit analysis? - correct answer
Profits
Cash
What are two impacts on costs as sales volume increases? - correct answer Total fixed
costs will stay the same.
Fixed costs per unit will decrease.
A company is experiencing an increase in their bad debt expense.
