WGU Accounting for Decision Makers C213 VAC2 : Accounting-for-Decision-Makers

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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. 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 fairly reflect its financial position
C) Whether a company's financial statements were prepared by a trained bookkeeper
D) Whether a company's financial statements indicate it made a profit

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 total assets
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 gross sales

3. A corporation has liabilities and owners' equity of $100 million and $40 million respectively. What is the amount of the asset balance in this case?

A) $80 million
B) $60 million
C) $140 million
D) $25 million

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 paid for interest 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 from operations of $1,000

5. Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an invoice that includes more items than were actually received?

A) The inventory department counts and inspects items as received and forwards the receiving record to accounts payable
B) The company requires two signatures on each check in order for a payment to be sent
C) The accounts payable department uses prenumbered checks in the payment of supplier invoices
D) The purchasing department authorizes the order of all items before they occur

Solutions: