Accounting-for-Decision-Makers Actual Questions, Accounting-for-Decision-Makers Practice Test

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WGU Accounting-for-Decision-Makers Exam Syllabus Topics:

SectionWeightObjectives
Financial Analysis45–50%- Financial statement analysis techniques
  • 1. Ratio analysis: liquidity, profitability, solvency
  • 2. Trend and comparative analysis
- Purpose and components of financial statements
  • 1. Balance sheet, income statement, cash flow statement
  • 2. GAAP and reporting standards
Controls and Regulations10–15%- Internal control systems and principles
  • 1. Risk assessment and control activities
  • 2. Compliance with laws and regulations
Profit Planning10–15%- Cost-volume-profit (CVP) analysis
  • 1. Sensitivity analysis
  • 2. Break-even and target profit calculations
Budgeting and Decision Making10–15%- Relevant information for decision making
  • 1. Capital budgeting basics
  • 2. Make-or-buy, special order, keep-or-drop decisions
- Master budget and components
  • 1. Cash budgeting and forecasting
  • 2. Operating and financial budgets
Cost Systems20–25%- Cost concepts and classification
  • 1. Direct vs indirect costs
  • 2. Variable, fixed, mixed costs
- Costing methods
  • 1. Traditional costing
  • 2. Activity-based costing (ABC)

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Accounting-for-Decision-Makers Practice Test - Hottest Accounting-for-Decision-Makers Certification

Preparing with ValidBraindumps WGU Accounting for Decision Makers C213 VAC2 (Accounting-for-Decision-Makers) practice exam would be the most effective way to get success. ValidBraindumps would give you access to WGU Accounting for Decision Makers C213 VAC2 (Accounting-for-Decision-Makers) exam questions that are factual and unambiguous, as well as information that is important for the preparation of the Accounting-for-Decision-Makers Accounting-for-Decision-Makers exam.

WGU Accounting for Decision Makers C213 VAC2 Sample Questions (Q60-Q65):

NEW QUESTION # 60
What can be deduced when a company has an asset turnover of 0.95?

Answer: B

Explanation:
The correct answer is A. The company was able to generate $0.95 in sales for each dollar in assets . The asset turnover ratio is calculated as:
Asset turnover = Total sales / Total assets
This ratio measures how efficiently a company uses its assets to produce revenue. If a company has an asset turnover of 0.95 , it means that for every $1.00 invested in assets , the company generated $0.95 in sales during the period.
This ratio is especially useful in comparing operating efficiency across time or between similar companies. A higher asset turnover usually indicates more efficient use of assets in generating sales, while a lower ratio may suggest underused resources or a more asset-intensive business model.
Option B is incorrect because asset turnover does not measure equity generation. Option C is incorrect because it does not compare liabilities to assets. Option D is incorrect because profit per dollar of assets is more closely related to return on assets, not asset turnover. Since the formula directly links sales with assets , the only correct interpretation of a 0.95 asset turnover is $0.95 in sales per $1.00 of assets , which is Option A .


NEW QUESTION # 61
Which formula yields a cash times interest earned ratio of 11?

Answer: A

Explanation:
The correct answer is B . The cash times interest earned ratio measures a company's ability to cover its cash interest payments from cash generated before interest and taxes. The formula is:
Cash times interest earned = Cash from operations before interest and taxes / Cash paid for interest If the ratio is 11 , then the numerator must be 11 times the denominator. Using the amounts in the answer choices, $11,000 divided by $1,000 = 11 , which matches the required result exactly. The Journal of Accountancy describes cash interest coverage using cash flow from operations adjusted for interest and taxes in the numerator and interest paid in the denominator.
Option A is incorrect because acquisitions relate to investing activities, not interest coverage. Option C is incorrect because dividing by cash from operations does not produce the interest coverage ratio. Option D is incorrect because income taxes are not the denominator in this ratio. This ratio is useful in solvency analysis because it shows how many times a firm can pay its interest obligations using cash-based operating performance. Therefore, Option B is the correct formula.


NEW QUESTION # 62
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?

Answer: C

Explanation:
The correct answer is D. $140 million . This question is solved using the basic accounting equation :
Assets = Liabilities + Owners' Equity
The company has $100 million in liabilities and $40 million in owners' equity. Adding these together gives:
Assets = $100 million + $40 million = $140 million
Therefore, the asset balance must be $140 million . This relationship is fundamental in accounting because every recorded transaction must keep the accounting equation in balance. Authoritative accounting materials explain that assets are financed by two main sources: liabilities, which represent creditors' claims, and equity, which represents owners' claims.
Option A, B, and C are incorrect because they do not satisfy the accounting equation. In financial statement analysis, this equation is the foundation of the balance sheet and helps users understand how a business finances its resources. When liabilities increase or equity increases, total assets must reflect those financing sources. Since both liabilities and owners' equity together total $140 million , assets must also total $140 million . That makes Option D the only correct choice.


NEW QUESTION # 63
Where should a company report cash payments to acquire or construct long-term fixed assets on a statement of cash flows?

Answer: B

Explanation:
The correct answer is C. Cash flows from investing activities . Cash paid to acquire, build, or improve long- term fixed assets such as land, buildings, machinery, and equipment is classified as an investing cash outflow on the statement of cash flows. OpenStax explains that the investing section of the statement of cash flows relates to changes in long-term assets , which includes capital expenditures for property, plant, and equipment. FASB cash flow guidance also requires classifying cash receipts and payments as operating, investing, or financing based on the nature of the activity.
Option B is incorrect because operating activities relate to the core day-to-day revenue-producing operations of the company. Option D is incorrect because financing activities involve obtaining or repaying capital, such as borrowing, issuing stock, or paying dividends. Option A is not a standard reporting category under the statement of cash flows. Since buying or constructing long-term fixed assets represents investment in productive resources for future use, the correct classification is Cash flows from investing activities .


NEW QUESTION # 64
Which two procedures do external auditors use to gain confidence in the quality of a company's financial reporting processes?
Choose 2 answers.

Answer: C,E

Explanation:
The correct answers are A and C . External auditors gather audit evidence by examining accounting records and supporting documents and by obtaining evidence directly from third parties . PCAOB standards describe confirmation as a procedure for obtaining audit evidence from a knowledgeable external source, and this is commonly used for items such as cash, receivables, and certain terms of transactions.
Examining records to support balances and transactions is another core audit procedure. Auditors inspect invoices, contracts, bank statements, reconciliations, journals, and other documentation to determine whether reported balances are supported and fairly stated. These procedures directly relate to the reliability of financial reporting. In contrast, customer satisfaction surveys, marketing analysis, and public-image polling may be useful for business strategy or branding, but they are not standard external audit procedures used to support financial statement assertions. Audit work focuses on relevant, reliable evidence tied to existence, completeness, valuation, rights and obligations, and presentation. Therefore, the two valid procedures are examining records and obtaining third-party confirmations , making A and C the correct answers.


NEW QUESTION # 65
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