WGU C213 PRE-ASSESSMENT STUDY GUIDE WITH QUESTIONS AND ANSWERS COMPLETE REVIEW FOR ACCOUNTING PRINCIPLES AND FINANCIAL REPORTING

WGU C213 Pre - Assessment study guide With
Answers Graded A+ Latest 2025/2026

1. What does accounting focus on?: The impact a business's activities have on
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its overall financial performance
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2. Which report summarizes cash collections and cash expenditures from ope
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rating, investing, and financing activities over a period of time?: Statement of ca
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sh flows
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3.
Which users would have a primary concern with an organization's ability to p
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rovide healthcare benefits?: Employees
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4. Which body regulates a certified public accounting firm's audit practices w
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hen the firm is auditing a large publicly traded company?: The Public Com-
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gpany Accounting Oversight Board (PCAOB)
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5. What has had the most significant impact on accounting practices?: Infor-
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g mation technologyg




6. What two items of information are revealed on the balance sheet?
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Choose 2 answers: Ownership. g g g g




Debt
7. Which term is defined as the residual interest in the net assets of a compa-
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g ny?: Owners' equity
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8
A corporation has total liabilities of $300 million, total owners' equity of $101
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,What is the value of the firm's long-term assets?: $350 million
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9. Which situation should result in revenue recognition on the income state-
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g ment for the year ending 12/31/14 if the firm is using accrual-basis account-
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g ing?: In 2014, a company provides services to a customer for which cash will be col
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lected the next year (2015).
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10.
Which category on the statement of cash flows summarizes cash receipts a
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nd payments to owners and creditors of the company?: Cash flows from financin
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g activities
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11. Where would an investor find a summary of a company's significant ac-
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g counting policies?: In the notes to financial statements
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12. Which assurance does an external audit report provide for its readers?: -
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The company's financial statements fairly reflect its financial position
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13. Reliable: Information that can be verified g g g g g




14. Relevant: Information having to do with the matter at hand
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15. Material: Information that is important enough to make a difference
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16. Conservatism: Information related to recognizing losses as they occur g g g g g g g g




17. What are steps in the decision cycle?: 1 Prepare financial statements. 2
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gAnalyze financial statements.
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,3 Gather information. g




4 Make decision. g




5 Implement decision. g




18. Partial financial information for a company is as follows:
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Current assets $36,543 Tot g g g




al assets $58,719 Current l
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iabilities $24,824 Total liabi g g g




lities $48,561 g




Stockholders' equity $10,158 Sale g g g y




s $46,997
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Net Income $ 3,761
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Market value of shares $41,316 g g g g y




What is the price-earnings (PE) ratio for this company?: 11.0
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19. What is consistent with a continual decline in gross profit if the firm's cost o
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f goods sold remains the same?: Continual decrease in sales
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20. Which two cash flow adequacy ratios represent a cash cow?: -
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$6,991/$5,486. $5,220/$1,875. g y




21. Which formula yields a cash times interest earned ratio of 11?: Cash before in t
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erest and taxes of $11,000 / cash paid for interest of $1,000
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22. Which form of debt should be reported in the long-term liability category?-
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: Notes payable expected to be paid in 18 months
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23. In January of year 1, a company began doing business as a corporation in o
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rder to sell technology-
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related accessories and services. During its first month of operations, the fol
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, lowing events occurred:g g




January 1 g y




The corporation received $1,000,000 in cash in exchange for stock issued to st
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ockholders.


January 3 g y




The corporation borrowed $250,000 from bank. The loan is a four-
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year loan with an interest rate of 12 percent, payable each year on January 1 be
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yginning in year 2. g g g




January 5 g y




The corporation purchased equipment to be used in the business for $200,000
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g cash.y




January 8 g




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