Page 1 of 70
WGU C213 – PRE-ASSESSMENT:
ACCOUNTING
FOR DECISION MAKERS PVAC EXAM
QUESTIONS AND CORRECT
DETAILED ANSWERS
1. Which term is defined as the residual interest in the net assets of a
company?
O Owner's Equity
O Revenues
O Operating Income
O Liabilities
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O Owner's Equity
2. A corporation has total liabilities of $300 million, total owners' equity
of $100 million, and current assets of $50 million.
What is the value of the firm's long-term assets?
O $250 million O
$350 million
O $400 million
O $450 million
Assets = Liabilities + Equity x +
50m = 300m + 100m
Solving for x = 350m
O $350 million
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3. Which situation should result in revenue recognition on the income
statement for the year ending 12/31/14 if the firm is using accrual-basis
accounting?
O In 2014, a company collects cash from a customer for services it will
provide next year (2015)
O In 2014, a company collects cash from a customer for services it
provided in the previous year (2013)
O In 2014, a company enters into a contract whereby it agrees to provide
services to a customer next year in (2015)
O In 2014, a company provide services to a customer for cash will be
collected the next year (2015)
O In 2014, a company provide services to a customer for cash will be
collected the next year (2015)
4. Which category on the statement of cash flows summarizes cash
receipts and payments to owners and creditors of the company?
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O Cash flows from business activities
O Cash flows from financing activities
O Cash flows from investing activities
O Cash flows from operating activities
O Cash flows from financing activities
5. What does accounting focus on?
O The impact a business's activities have on its public image
O The impact a business's activities have on its relationship with
customers
O The impact a business's activities have on the environment
O The impact a business's activities have on its overall financial
performance
WGU C213 – PRE-ASSESSMENT:
ACCOUNTING
FOR DECISION MAKERS PVAC EXAM
QUESTIONS AND CORRECT
DETAILED ANSWERS
1. Which term is defined as the residual interest in the net assets of a
company?
O Owner's Equity
O Revenues
O Operating Income
O Liabilities
,Page 2 of 70
O Owner's Equity
2. A corporation has total liabilities of $300 million, total owners' equity
of $100 million, and current assets of $50 million.
What is the value of the firm's long-term assets?
O $250 million O
$350 million
O $400 million
O $450 million
Assets = Liabilities + Equity x +
50m = 300m + 100m
Solving for x = 350m
O $350 million
,Page 3 of 70
3. Which situation should result in revenue recognition on the income
statement for the year ending 12/31/14 if the firm is using accrual-basis
accounting?
O In 2014, a company collects cash from a customer for services it will
provide next year (2015)
O In 2014, a company collects cash from a customer for services it
provided in the previous year (2013)
O In 2014, a company enters into a contract whereby it agrees to provide
services to a customer next year in (2015)
O In 2014, a company provide services to a customer for cash will be
collected the next year (2015)
O In 2014, a company provide services to a customer for cash will be
collected the next year (2015)
4. Which category on the statement of cash flows summarizes cash
receipts and payments to owners and creditors of the company?
, Page 4 of 70
O Cash flows from business activities
O Cash flows from financing activities
O Cash flows from investing activities
O Cash flows from operating activities
O Cash flows from financing activities
5. What does accounting focus on?
O The impact a business's activities have on its public image
O The impact a business's activities have on its relationship with
customers
O The impact a business's activities have on the environment
O The impact a business's activities have on its overall financial
performance
