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WGU Accounting-for-Decision-Makers Exam Syllabus Topics:

WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. In January of Year 1, a company began doing business as a corporation in order to sell technology-related accessories and services. During its first month of operations, the following events occurred:
January 1
The corporation received $900,000 in cash in exchange for stock issued to stockholders.
January 3
The corporation borrowed $250,000 from a bank. The loan is a four-year loan with an interest rate of 12%, payable each year on January 1 beginning in Year 2.
January 5
The corporation purchased equipment to be used in the business for $200,000 cash.
January 8
The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was put on credit accounts with suppliers.
January 15
The corporation hired five employees. Each employee will be paid $1,000 at the end of each month.
January 30
The corporation paid $6,000 cash for a one-year insurance policy. The policy period will begin on February 1, Year 1.
What will be the impact of the January 1 event on the company's balance sheet on that date, along with an increase to cash of $900,000?

A) Loan payable will increase by $900,000
B) Investments will increase by $900,000
C) Retained earnings will increase by $900,000
D) Stockholders' equity will increase by $900,000

2. Which two details can management determine through a cost-volume-profit analysis?
Choose 2 answers.

A) The impact of past income tax costs on a business organization's profit margin
B) The impact that a change in cost would have on a business organization's profit margin in the future
C) The impact of past transactions on a business organization's profit margin
D) The impact of a change in a business organization's number of units sold to reach a certain profit margin in the future

3. What does it mean if a company has a debt ratio of 101.5%?

A) The company has 1.5% more current liabilities than current assets
B) The company has 1.5% more total liabilities than net income
C) The company has 1.5% more total liabilities than gross sales
D) The company has 1.5% more total liabilities than total assets

4. Which formula yields a cash times interest earned ratio of 11?

A) Cash before interest and taxes of $11,000 / cash paid for acquisitions of $1,000
B) Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
C) Cash before interest and taxes of $11,000 / cash from operations of $1,000
D) Cash before interest and taxes of $11,000 / cash paid for income taxes of $1,000

5. What can be determined when a firm performs an external audit of a company's financial statements?

A) Whether a company's financial statements indicate that the company has to pay income taxes
B) Whether a company's financial statements indicate it made a profit
C) Whether a company's financial statements were prepared by a trained bookkeeper
D) Whether a company's financial statements fairly reflect its financial position

Solutions: