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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Which organization establishes rules U.S. companies use to record and report accounting transactions?

A) Accounting Principles Board
B) Financial Accounting Standards Board
C) Internal Revenue Service
D) Securities and Exchange Commission

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

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

3. How are activity-based costing systems different from traditional costing systems?

A) Activity-based costing systems require less time and expense to administer than traditional costing systems
B) Activity-based costing systems are based on a single cost driver and traditional costing systems are based on multiple cost drivers
C) Activity-based costing systems provide a more precise assignment of overhead costs when multiple products are manufactured than traditional costing systems do
D) Activity-based costing systems are used with homogeneous products while traditional costing systems are used with heterogeneous products

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

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

5. Which financial statement is used to determine a company's income and expenses for a specific period?

A) Balance sheet
B) Statement of retained earnings
C) Income statement
D) Statement of cash flows

Solutions: