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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

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

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

2. A company prepared the following contribution margin income statement for the actual sale of 10,000 shoes:
Sales revenue = $600,000
Variable costs = $400,000
Contribution margin = $200,000
Less fixed costs = $150,000
Net income = $50,000
What would be the forecasted net income for the sale of 14,000 shoes based on the actual results above?

A) $40,000
B) $230,000
C) $70,000
D) $130,000

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

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

4. The following list provides partial financial information for a company.
Financial Category | 20X3 | 20X2
Net income | $3,540 | ?
Cash from operations | $4,417 | ?
Cash paid for capital expenditures | $5,613 | ?
Cash paid for acquisitions | $5,964 | ?
Cash paid for interest | $2,782 | ?
Cash paid for income taxes | $2,860 | ?
What is the cash flow to net income ratio for this company in 20X2?

A) 1.80
B) 2.45
C) 1.35
D) -0.01

5. 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 used with homogeneous products while traditional costing systems are used with heterogeneous products
C) Activity-based costing systems are based on a single cost driver and traditional costing systems are based on multiple cost drivers
D) Activity-based costing systems provide a more precise assignment of overhead costs when multiple products are manufactured than traditional costing systems do

Solutions: