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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. 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 current liabilities than current assets
C) The company has 1.5% more total liabilities than net income
D) The company has 1.5% more total liabilities than total assets

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

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

3. Which two details can management determine through a cost-volume-profit analysis?
Choose 2 answers.

A) The impact of a change in a business organization's number of units sold to reach a certain profit margin in the future
B) The impact that a change in cost would have on a business organization's profit margin in the future
C) The impact of past transactions on a business organization's profit margin
D) The impact of past income tax costs on a business organization's profit margin

4. Which item is an operating activity under a U.S. generally accepted accounting principles (GAAP) statement of cash flows?

A) Cash receipts from the sale of a business segment
B) Cash payments for administration expenses
C) Cash receipts for the sale of plant assets
D) Cash payments for purchase of plant assets

5. Which events represent financial information recorded in the accounting system of a business?

A) Personal events of each business owner that are likely to occur in the future
B) Business events that are likely to occur in the future
C) Business events that have already occurred
D) Personal events of each business owner during a year

Solutions: