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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. 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

2. A company budgeted the following purchases for raw materials:
January = $10,000
February = $20,000
March = $25,000
April = $22,000
May = $27,000
June = $30,000
July = $24,000
The company has a policy of paying for 40% of purchases in the month of the purchase, 35% in the month following the purchase, and 25% in the second month following the purchase.
What are the budgeted cash disbursements for May based on this information?

A) $24,750
B) $25,050
C) $27,300
D) $18,500

3. How does management accounting differ from financial accounting?

A) Management accounting is restricted to providing financial rather than nonfinancial data
B) Management accounting is not used to gain a competitive advantage in the marketplace
C) Management accounting presents an unbiased view of a company's economic performance
D) Management accounting is used primarily for internal planning, control, and evaluation

4. 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) Increase in assets by $750 and decrease in liability by $750
C) Decrease in assets by $750 and decrease in liability by $750
D) Decrease in assets by $750 and increase in liability by $750

5. What is an advantage of the indirect method of the cash flow statement?

A) Easy for a novice to decipher operating cash flow information
B) Easy to reconcile between net income and cash flows
C) Easy to highlight the difference between direct and indirect costs
D) Easy to avoid making mistakes because the method reveals indirect costs

Solutions: