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

2. Which information does a balance sheet provide about a company?

A) Assets and liabilities for a specific point in time
B) Cash collections and cash expenditures for a period of time
C) Cash collections and cash expenditures at a specific point in time
D) Revenues and expenses for a period of time

3. Which technique describes the practice of incurring debt but fully paying the debt over time?

A) Profit control
B) Liability deferral
C) Accounting management
D) Income smoothing

4. 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) $18,500
D) $27,300

5. 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 acquisitions of $1,000
D) Cash before interest and taxes of $11,000 / cash paid for interest of $1,000

Solutions: