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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Which two item subtotals are included in a multi-step income statement?
Choose 2 answers.

A) Current liabilities
B) Gross profit
C) Total assets
D) Income from operations

2. During the year, a company purchased goods on a credit basis for its supplies of $750.
What would be the impact on the accounting equation and financial statement?

A) Increase in assets by $750 and increase in liability by $750
B) Decrease in assets by $750 and increase in liability by $750
C) Decrease in assets by $750 and decrease in liability by $750
D) Increase in assets by $750 and decrease in liability by $750

3. What can be deduced when a company has an asset turnover of 0.95?

A) The company was able to generate $0.95 in profit for each dollar in assets
B) The company was able to generate $0.95 in liabilities for each dollar in assets
C) The company was able to generate $0.95 in equity for each dollar in assets
D) The company was able to generate $0.95 in sales for each dollar in assets

4. Which source of cash is the best indicator of a firm's viability as an ongoing concern?

A) Cash from investing activities
B) Cash from operating activities
C) Cash from production activities
D) Cash from financing activities

5. Which two examples represent financial statement errors?
Choose 2 answers.

A) An accounting employee overpays a supplier and receives a portion of the excess as a kickback
B) An accountant unintentionally records amounts as revenue that were prepaid by customers but not yet earned
C) An outside auditor disagrees with the amount reported as an allowance for uncollectible accounts receivable
D) An accounting department miscalculates the payroll tax due at year-end, resulting in an inaccurate liability

Solutions: