WGU C213: Accounting for Decision
Makers (Latest 2026/2027 Update)
Questions and Verified Answers | 100%
Correct | Grade A
This WGU C213 Accounting for Decision Makers is a 3-unit MBA-level course focusing on financial
analysis and cost systems (approx. 77% of the OA) to support business decision-making. The exam
consists of roughly 80+ multiple-choice questions covering financial statements, cost behaviors, and
budgeting, with a focus on applying concepts over calculation.
Key Exam Information (2026)
• Total Questions: 70–80 (Exam descriptions suggest around 77-80 questions)
• Exam Type: Multiple-choice, Objective Assessment (OA).
• Focus Areas: Financial Analysis (Chapters 1–6) and Cost Systems (Chapter 9) represent the
majority of the exam content.
• Time Limit: 2 hours (estimated).
• Formulas: Formulas are provided during the test; knowing how to apply them is more
important than memorizing them.
Core Competencies & Topics
• Financial Statements: Understanding the purpose of the balance sheet, income statement,
and statement of cash flows.
• Cost Systems: Differentiating between direct, indirect, differential, and sunk costs.
• Accounting Principles: Accrual accounting, revenue recognition, and GAAP/IFRS basics.
• Financial Analysis: Calculating and interpreting ratios (liquidity, profitability, leverage).
• Managerial Accounting: Budgeting, variance analysis, and job-order costing.
Q1. In what order are assets typically presented on the balance sheet? [Multiple Choice]
A) Assets are typically listed by order of liquidity
B) Assets are listed alphabetically by account name
C) Assets are ordered by the date they were acquired
, D) Assets are grouped only by their physical type regardless of convertibility
Answer: Assets are typically listed by order of liquidity
Explanation: On a balance sheet, assets are presented from most liquid (e.g., cash) to least liquid (e.g.,
long‑term equipment) so users can see how quickly assets can be converted into cash. The distractors are
incorrect because: (a) “Alphabetical order” is arbitrary and not informative about convertibility; (b) “Order
of acquisition date” hides liquidity and current availability; (c) “Grouped only by physical type” (current vs.
fixed) may be partially true but the standard presentation emphasizes liquidity within asset classifications.
Q2. Which statement correctly describes the role of the PCAOB? [Multiple Choice]
A) Inspects audit practices of registered firms and can investigate and sanction questionable
audits
B) Drafts generally accepted accounting principles for corporate financial reporting
C) Collects federal taxes and enforces compliance with tax laws
D) Issues professional certifications and membership services for accountants
Answer: Inspects audit practices of registered firms and can investigate and sanction
questionable audits
Explanation: The Public Company Accounting Oversight Board (PCAOB) oversees auditors of public
companies by inspecting audit practices and, when necessary, investigating and imposing sanctions to
protect investors. The distractors are incorrect because: (a) “Drafts GAAP accounting standards” is FASB's
function; (b) “Collects income taxes and enforces tax law” is the IRS; (c) “Issues professional certifications
and membership benefits” more closely describes the AICPA, not the PCAOB's inspection and enforcement
role.
Q3. Which statement best describes the purpose of the balance sheet? [Multiple Choice]
A) Reports a company's financial position at a specified point in time and lists assets, liabilities,
and owners' equity
B) Shows a company's revenue and expense trends across multiple periods
C) Details only cash receipts and payments from operating activities
D) Itemizes production and operational performance metrics for internal use
Answer: Reports a company's financial position at a specified point in time and lists assets,
liabilities, and owners' equity
Explanation: A balance sheet is a snapshot that shows what a company owns and owes at a single date; it
lists resources (assets), obligations (liabilities), and net ownership interest (owners' equity). The distractors
are wrong because: (a) “Shows only revenue and expense trends over a period” describes an income
statement or trend analysis, not a point-in-time position; (b) “Details cash flows across operating activities
only” describes a cash-flow detail, not the full balance sheet; (c) “Itemizes operational metrics like
production output” refers to operational reports unrelated to the balance sheet's financial position focus.
,Q4. Which best describes the statement of cash flows? [Multiple Choice]
A) Reports cash collected and paid in operating, investing, and financing activities
B) Summarizes revenues and expenses to determine net income for a period
C) Lists assets, liabilities, and owners' equity at the end of a period
D) Calculates taxable income used to determine income tax payable
Answer: Reports cash collected and paid in operating, investing, and financing activities
Explanation: The statement of cash flows categorizes cash movements by operating (day ‑to‑day business),
investing (long‑term asset purchases/sales), and financing (debt/equity transactions and dividends). This
statement shows actual cash in and out, complementing accrual-based income and balance sheet reports.
The distractors are incorrect because: (a) “Summarizes revenues and expenses to get net income” is the
income statement's role; (b) “Lists assets, liabilities, and equity at a point in time” is the balance sheet; (c)
“Provides tax basis calculations to compute taxable income” is a tax reporting function, not the cash-flow
statement.
Q5. What is the definition of bookkeeping? [Multiple Choice]
A) The preservation of a systematic, quantitative record of an activity
B) Analyzing financial data to guide managerial decisions
C) Setting accounting policies and financial reporting standards
D) Auditing financial statements to ensure regulatory compliance
Answer: The preservation of a systematic, quantitative record of an activity
Explanation: Bookkeeping is the systematic and quantitative process of recording transactions and
maintaining records. It focuses on accurate, organized entries rather than higher-level analysis or
reporting. The distractors are incorrect because: (a) “Analyzing managerial decisions” is an analytical
function beyond bookkeeping; (b) “Setting accounting policy standards” is a standards-setting or
governance task, not record preservation; (c) “Auditing financial statements for compliance” is a
verification function performed after records exist, not the act of preserving them.
Q6. What is the primary purpose of accounting information? [Multiple Choice]
A) Information intended to be useful in making decisions about the future
B) A historical narrative listing every past transaction in detail
C) Internal human-resources metrics used only for staffing
D) Legal documents that prove ownership and title
Answer: Information intended to be useful in making decisions about the future
Explanation: Accounting information is produced so decision‑makers can forecast, plan, and choose
among alternatives — it must be forward‑looking in its usefulness. The distractors are incorrect because:
(a) “Historical narrative of transactions” focuses only on past events without implying decision usefulness;
, (b) “Internal HR data for staffing” is specialized operational data, not general accounting information
aimed at financial decisions; (c) “Legal documents proving ownership” are important records but are legal
evidence rather than the broad decision‑useful financial information accounting provides.
Q7. What was the primary effect of the Sarbanes‑Oxley Act as described in the source?
[Multiple Choice]
A) An act that increased federal scrutiny of financial statement production after accounting
scandals
B) A voluntary industry guidance document recommending best practices for accountants
C) A tax reform law that significantly changed corporate tax rates
D) An international treaty that harmonized accounting standards globally
Answer: An act that increased federal scrutiny of financial statement production after
accounting scandals
Explanation: The Sarbanes‑Oxley Act was enacted in response to major corporate accounting scandals and
introduced stricter federal oversight, internal control requirements, and penalties to restore investor
confidence. The distractors are wrong because: (a) “A voluntary industry guidance document” understates
its legal force — Sarbanes‑Oxley is federal law; (b) “A tax reform law changing corporate tax rates”
confuses tax legislation with corporate governance reform; (c) “An international agreement harmonizing
accounting standards” mischaracterizes it — SOX is U.S. federal law focused on disclosure and auditing,
not international standards harmonization.
Q8. Which set names the three primary financial statements? [Multiple Choice]
A) The balance sheet, the income statement, and the statement of cashflows
B) Trial balance, budgets, and bank reconciliations
C) Tax return, payroll report, and managerial forecast
D) Accounts receivable aging, inventory schedule, and equity rollforward
Answer: The balance sheet, the income statement, and the statement of cashflows
Explanation: The three core financial statements that together describe a company's financial position and
performance are the balance sheet (position at a point in time), the income statement (period
performance), and the statement of cash flows (cash movements). The distractors are wrong because each
lists other reports or mixes statements with nonfinancial reports: (a) “Trial balance, budgets, and bank
reconciliations” are internal tools but not the primary external financial statements; (b) “Tax return, payroll
report, and managerial forecast” are specific reports or internal forecasts, not the standard three
statements; (c) “Accounts receivable aging, inventory schedule, and equity rollforward” are supporting
schedules, not the three primary financial statements.
Q9. What primary information does the income statement provide? [Multiple Choice]
A) Reports the amount of net income earned by a company during a period
B) Lists a company's assets and liabilities at a point in time
Makers (Latest 2026/2027 Update)
Questions and Verified Answers | 100%
Correct | Grade A
This WGU C213 Accounting for Decision Makers is a 3-unit MBA-level course focusing on financial
analysis and cost systems (approx. 77% of the OA) to support business decision-making. The exam
consists of roughly 80+ multiple-choice questions covering financial statements, cost behaviors, and
budgeting, with a focus on applying concepts over calculation.
Key Exam Information (2026)
• Total Questions: 70–80 (Exam descriptions suggest around 77-80 questions)
• Exam Type: Multiple-choice, Objective Assessment (OA).
• Focus Areas: Financial Analysis (Chapters 1–6) and Cost Systems (Chapter 9) represent the
majority of the exam content.
• Time Limit: 2 hours (estimated).
• Formulas: Formulas are provided during the test; knowing how to apply them is more
important than memorizing them.
Core Competencies & Topics
• Financial Statements: Understanding the purpose of the balance sheet, income statement,
and statement of cash flows.
• Cost Systems: Differentiating between direct, indirect, differential, and sunk costs.
• Accounting Principles: Accrual accounting, revenue recognition, and GAAP/IFRS basics.
• Financial Analysis: Calculating and interpreting ratios (liquidity, profitability, leverage).
• Managerial Accounting: Budgeting, variance analysis, and job-order costing.
Q1. In what order are assets typically presented on the balance sheet? [Multiple Choice]
A) Assets are typically listed by order of liquidity
B) Assets are listed alphabetically by account name
C) Assets are ordered by the date they were acquired
, D) Assets are grouped only by their physical type regardless of convertibility
Answer: Assets are typically listed by order of liquidity
Explanation: On a balance sheet, assets are presented from most liquid (e.g., cash) to least liquid (e.g.,
long‑term equipment) so users can see how quickly assets can be converted into cash. The distractors are
incorrect because: (a) “Alphabetical order” is arbitrary and not informative about convertibility; (b) “Order
of acquisition date” hides liquidity and current availability; (c) “Grouped only by physical type” (current vs.
fixed) may be partially true but the standard presentation emphasizes liquidity within asset classifications.
Q2. Which statement correctly describes the role of the PCAOB? [Multiple Choice]
A) Inspects audit practices of registered firms and can investigate and sanction questionable
audits
B) Drafts generally accepted accounting principles for corporate financial reporting
C) Collects federal taxes and enforces compliance with tax laws
D) Issues professional certifications and membership services for accountants
Answer: Inspects audit practices of registered firms and can investigate and sanction
questionable audits
Explanation: The Public Company Accounting Oversight Board (PCAOB) oversees auditors of public
companies by inspecting audit practices and, when necessary, investigating and imposing sanctions to
protect investors. The distractors are incorrect because: (a) “Drafts GAAP accounting standards” is FASB's
function; (b) “Collects income taxes and enforces tax law” is the IRS; (c) “Issues professional certifications
and membership benefits” more closely describes the AICPA, not the PCAOB's inspection and enforcement
role.
Q3. Which statement best describes the purpose of the balance sheet? [Multiple Choice]
A) Reports a company's financial position at a specified point in time and lists assets, liabilities,
and owners' equity
B) Shows a company's revenue and expense trends across multiple periods
C) Details only cash receipts and payments from operating activities
D) Itemizes production and operational performance metrics for internal use
Answer: Reports a company's financial position at a specified point in time and lists assets,
liabilities, and owners' equity
Explanation: A balance sheet is a snapshot that shows what a company owns and owes at a single date; it
lists resources (assets), obligations (liabilities), and net ownership interest (owners' equity). The distractors
are wrong because: (a) “Shows only revenue and expense trends over a period” describes an income
statement or trend analysis, not a point-in-time position; (b) “Details cash flows across operating activities
only” describes a cash-flow detail, not the full balance sheet; (c) “Itemizes operational metrics like
production output” refers to operational reports unrelated to the balance sheet's financial position focus.
,Q4. Which best describes the statement of cash flows? [Multiple Choice]
A) Reports cash collected and paid in operating, investing, and financing activities
B) Summarizes revenues and expenses to determine net income for a period
C) Lists assets, liabilities, and owners' equity at the end of a period
D) Calculates taxable income used to determine income tax payable
Answer: Reports cash collected and paid in operating, investing, and financing activities
Explanation: The statement of cash flows categorizes cash movements by operating (day ‑to‑day business),
investing (long‑term asset purchases/sales), and financing (debt/equity transactions and dividends). This
statement shows actual cash in and out, complementing accrual-based income and balance sheet reports.
The distractors are incorrect because: (a) “Summarizes revenues and expenses to get net income” is the
income statement's role; (b) “Lists assets, liabilities, and equity at a point in time” is the balance sheet; (c)
“Provides tax basis calculations to compute taxable income” is a tax reporting function, not the cash-flow
statement.
Q5. What is the definition of bookkeeping? [Multiple Choice]
A) The preservation of a systematic, quantitative record of an activity
B) Analyzing financial data to guide managerial decisions
C) Setting accounting policies and financial reporting standards
D) Auditing financial statements to ensure regulatory compliance
Answer: The preservation of a systematic, quantitative record of an activity
Explanation: Bookkeeping is the systematic and quantitative process of recording transactions and
maintaining records. It focuses on accurate, organized entries rather than higher-level analysis or
reporting. The distractors are incorrect because: (a) “Analyzing managerial decisions” is an analytical
function beyond bookkeeping; (b) “Setting accounting policy standards” is a standards-setting or
governance task, not record preservation; (c) “Auditing financial statements for compliance” is a
verification function performed after records exist, not the act of preserving them.
Q6. What is the primary purpose of accounting information? [Multiple Choice]
A) Information intended to be useful in making decisions about the future
B) A historical narrative listing every past transaction in detail
C) Internal human-resources metrics used only for staffing
D) Legal documents that prove ownership and title
Answer: Information intended to be useful in making decisions about the future
Explanation: Accounting information is produced so decision‑makers can forecast, plan, and choose
among alternatives — it must be forward‑looking in its usefulness. The distractors are incorrect because:
(a) “Historical narrative of transactions” focuses only on past events without implying decision usefulness;
, (b) “Internal HR data for staffing” is specialized operational data, not general accounting information
aimed at financial decisions; (c) “Legal documents proving ownership” are important records but are legal
evidence rather than the broad decision‑useful financial information accounting provides.
Q7. What was the primary effect of the Sarbanes‑Oxley Act as described in the source?
[Multiple Choice]
A) An act that increased federal scrutiny of financial statement production after accounting
scandals
B) A voluntary industry guidance document recommending best practices for accountants
C) A tax reform law that significantly changed corporate tax rates
D) An international treaty that harmonized accounting standards globally
Answer: An act that increased federal scrutiny of financial statement production after
accounting scandals
Explanation: The Sarbanes‑Oxley Act was enacted in response to major corporate accounting scandals and
introduced stricter federal oversight, internal control requirements, and penalties to restore investor
confidence. The distractors are wrong because: (a) “A voluntary industry guidance document” understates
its legal force — Sarbanes‑Oxley is federal law; (b) “A tax reform law changing corporate tax rates”
confuses tax legislation with corporate governance reform; (c) “An international agreement harmonizing
accounting standards” mischaracterizes it — SOX is U.S. federal law focused on disclosure and auditing,
not international standards harmonization.
Q8. Which set names the three primary financial statements? [Multiple Choice]
A) The balance sheet, the income statement, and the statement of cashflows
B) Trial balance, budgets, and bank reconciliations
C) Tax return, payroll report, and managerial forecast
D) Accounts receivable aging, inventory schedule, and equity rollforward
Answer: The balance sheet, the income statement, and the statement of cashflows
Explanation: The three core financial statements that together describe a company's financial position and
performance are the balance sheet (position at a point in time), the income statement (period
performance), and the statement of cash flows (cash movements). The distractors are wrong because each
lists other reports or mixes statements with nonfinancial reports: (a) “Trial balance, budgets, and bank
reconciliations” are internal tools but not the primary external financial statements; (b) “Tax return, payroll
report, and managerial forecast” are specific reports or internal forecasts, not the standard three
statements; (c) “Accounts receivable aging, inventory schedule, and equity rollforward” are supporting
schedules, not the three primary financial statements.
Q9. What primary information does the income statement provide? [Multiple Choice]
A) Reports the amount of net income earned by a company during a period
B) Lists a company's assets and liabilities at a point in time
