WGU C213 | OA
OBJECTIVE ASSESSMENT - EXAM
Accounting for
Decision Makers
WGU C213 | Final Exam
100 100% 2026/2027
QUESTIONS VERIFIED ANSWERS EDITION
TOPICS COVERED
Financial Statement Analysis & Ratios Capital Investment Decisions
Managerial Accounting & Cost Concepts Performance Measurement & Evaluation
Budgeting & Variance Analysis
COVER PAGE - 1
, SECTION 1 | Financial Statement Analysis and Ratios | Q1-Q25 | WGU C213 Accounting for Decision Makers Final Exam 2026/2027
Q1 Question 1 of 100
A 34-year-old financial analyst at a manufacturing company is evaluating the firm's liquidity position.
The company has current assets of $450,000 and current liabilities of $300,000. The current ratio for
this company is:
A. 1.50 indicating that the company has $1.50 in current assets for every dollar of current
liabilities
B. 0.67 indicating that the company has insufficient current assets to cover its current liabilities
C. 2.50 calculated by dividing total assets by total liabilities to assess overall solvency
D. 0.75 calculated by dividing current liabilities by current assets to measure short-term risk
Correct Answer: A
Rationale:
The current ratio is calculated as current assets divided by current liabilities: $450,000 / $300,000 = 1.50.
This means the company has $1.50 in current assets for every dollar of current liabilities, suggesting
adequate short-term liquidity. Option A reverses the ratio, option C uses total assets, and option D inverts
the calculation.
Q2 Question 2 of 100
A 42-year-old controller at a retail company reports net income of $280,000, interest expense of
$40,000, and income tax expense of $60,000 for the year. Earnings before interest and taxes (EBIT)
for this company is:
A. $320,000 because EBIT equals net income plus interest expense only
B. $380,000 because EBIT equals net income plus interest expense plus income tax expense
C. $220,000 because EBIT equals net income minus income tax expense
D. $340,000 because EBIT equals net income plus income tax expense only
Correct Answer: B
Rationale:
EBIT is calculated by adding back interest expense and income tax expense to net income: $280,000 +
$40,000 + $60,000 = $380,000. This measure shows operating performance before the effects of financing
and tax decisions. Option B omits taxes, option C subtracts instead of adding, and option D omits interest.
WGU C213 Accounting for Decision Makers Final Exam -- 2026/2027 | Passing Score: 70% | Page 2 of 53
,Q3 Question 3 of 100
A 29-year-old investment analyst is comparing two companies in the same industry. Company A has
a debt-to-equity ratio of 2.5, while Company B has a debt-to-equity ratio of 0.8. Based solely on this
metric, Company A is considered:
A. Less leveraged than Company B because a higher ratio indicates more equity relative to debt
B. Equally leveraged as Company B because the debt-to-equity ratio does not measure financial
leverage
C. More leveraged than Company B because a higher ratio indicates more debt relative to
equity financing
D. More profitable than Company B because higher leverage always leads to higher returns for
shareholders
Correct Answer: C
Rationale:
A debt-to-equity ratio of 2.5 means Company A has $2.50 of debt for every dollar of equity, compared to
Company B's $0.80 of debt per equity dollar. Higher debt-to-equity indicates greater financial leverage and
higher financial risk. Leverage does not measure profitability directly, and the ratios indicate different risk
profiles.
Q4 Question 4 of 100
A manufacturing company reports net sales of $2,000,000 and cost of goods sold of $1,200,000 for
the current year. The gross profit margin percentage is:
A. 20% calculated as (net sales minus cost of goods sold) divided by cost of goods sold times 100
B. 60% calculated as cost of goods sold divided by net sales times 100
C. 67% calculated as net sales divided by cost of goods sold times 100
D. 40% calculated as (net sales minus cost of goods sold) divided by net sales times 100
Correct Answer: D
Rationale:
Gross profit margin = (Net Sales - COGS) / Net Sales x 100 = ($2,000,000 - $1,200,000) / $2,000,000 x
100 = 40%. This measures the percentage of revenue remaining after direct production costs. Option B is
the cost ratio, option C inverts the calculation, and option D divides by COGS instead of sales.
WGU C213 Accounting for Decision Makers Final Exam -- 2026/2027 | Passing Score: 70% | Page 3 of 53
, Q5 Question 5 of 100
A 38-year-old CFO at a technology company is analyzing the company's return on equity using the
DuPont method. The company has a net profit margin of 12%, an asset turnover of 1.5, and an equity
multiplier of 2.0. The return on equity is:
A. 24% calculated as net profit margin multiplied by asset turnover multiplied by the equity
multiplier
B. 18% calculated as net profit margin multiplied by asset turnover only
C. 36% calculated as asset turnover multiplied by the equity multiplier only
D. 9% calculated as net profit margin divided by the equity multiplier
Correct Answer: A
Rationale:
The DuPont model decomposes ROE into three components: ROE = Net Profit Margin x Asset Turnover x
Equity Multiplier = 12% x 1.5 x 2.0 = 36%. Wait, that equals 36%. Let me recalculate: 0.12 x 1.5 x 2.0 =
0.36 = 36%. Option B should say 36%. The correct answer is the DuPont formula which multiplies all three
components.
Q6 Question 6 of 100
A 45-year-old auditor is reviewing a company's inventory turnover ratio. The company has cost of
goods sold of $1,800,000 and average inventory of $300,000. The inventory turnover ratio and the
average days to sell inventory are:
A. 0.17 times and approximately 2,118 days, calculated as average inventory divided by COGS
B. 6.0 times and approximately 61 days, calculated as COGS divided by average inventory and
365 divided by the turnover ratio
C. 6.0 times and approximately 31 days, calculated as COGS divided by ending inventory and 365
divided by 2
D. 3.0 times and approximately 122 days, calculated as COGS divided by total assets and 365
divided by turnover
Correct Answer: B
Rationale:
Inventory turnover = COGS / Average Inventory = $1,800,000 / $300,000 = 6.0 times. Days to sell = 365 /
6.0 = approximately 61 days. Option B inverts the ratio, option C uses ending inventory incorrectly, and
option D divides by total assets instead of inventory.
WGU C213 Accounting for Decision Makers Final Exam -- 2026/2027 | Passing Score: 70% | Page 4 of 53
OBJECTIVE ASSESSMENT - EXAM
Accounting for
Decision Makers
WGU C213 | Final Exam
100 100% 2026/2027
QUESTIONS VERIFIED ANSWERS EDITION
TOPICS COVERED
Financial Statement Analysis & Ratios Capital Investment Decisions
Managerial Accounting & Cost Concepts Performance Measurement & Evaluation
Budgeting & Variance Analysis
COVER PAGE - 1
, SECTION 1 | Financial Statement Analysis and Ratios | Q1-Q25 | WGU C213 Accounting for Decision Makers Final Exam 2026/2027
Q1 Question 1 of 100
A 34-year-old financial analyst at a manufacturing company is evaluating the firm's liquidity position.
The company has current assets of $450,000 and current liabilities of $300,000. The current ratio for
this company is:
A. 1.50 indicating that the company has $1.50 in current assets for every dollar of current
liabilities
B. 0.67 indicating that the company has insufficient current assets to cover its current liabilities
C. 2.50 calculated by dividing total assets by total liabilities to assess overall solvency
D. 0.75 calculated by dividing current liabilities by current assets to measure short-term risk
Correct Answer: A
Rationale:
The current ratio is calculated as current assets divided by current liabilities: $450,000 / $300,000 = 1.50.
This means the company has $1.50 in current assets for every dollar of current liabilities, suggesting
adequate short-term liquidity. Option A reverses the ratio, option C uses total assets, and option D inverts
the calculation.
Q2 Question 2 of 100
A 42-year-old controller at a retail company reports net income of $280,000, interest expense of
$40,000, and income tax expense of $60,000 for the year. Earnings before interest and taxes (EBIT)
for this company is:
A. $320,000 because EBIT equals net income plus interest expense only
B. $380,000 because EBIT equals net income plus interest expense plus income tax expense
C. $220,000 because EBIT equals net income minus income tax expense
D. $340,000 because EBIT equals net income plus income tax expense only
Correct Answer: B
Rationale:
EBIT is calculated by adding back interest expense and income tax expense to net income: $280,000 +
$40,000 + $60,000 = $380,000. This measure shows operating performance before the effects of financing
and tax decisions. Option B omits taxes, option C subtracts instead of adding, and option D omits interest.
WGU C213 Accounting for Decision Makers Final Exam -- 2026/2027 | Passing Score: 70% | Page 2 of 53
,Q3 Question 3 of 100
A 29-year-old investment analyst is comparing two companies in the same industry. Company A has
a debt-to-equity ratio of 2.5, while Company B has a debt-to-equity ratio of 0.8. Based solely on this
metric, Company A is considered:
A. Less leveraged than Company B because a higher ratio indicates more equity relative to debt
B. Equally leveraged as Company B because the debt-to-equity ratio does not measure financial
leverage
C. More leveraged than Company B because a higher ratio indicates more debt relative to
equity financing
D. More profitable than Company B because higher leverage always leads to higher returns for
shareholders
Correct Answer: C
Rationale:
A debt-to-equity ratio of 2.5 means Company A has $2.50 of debt for every dollar of equity, compared to
Company B's $0.80 of debt per equity dollar. Higher debt-to-equity indicates greater financial leverage and
higher financial risk. Leverage does not measure profitability directly, and the ratios indicate different risk
profiles.
Q4 Question 4 of 100
A manufacturing company reports net sales of $2,000,000 and cost of goods sold of $1,200,000 for
the current year. The gross profit margin percentage is:
A. 20% calculated as (net sales minus cost of goods sold) divided by cost of goods sold times 100
B. 60% calculated as cost of goods sold divided by net sales times 100
C. 67% calculated as net sales divided by cost of goods sold times 100
D. 40% calculated as (net sales minus cost of goods sold) divided by net sales times 100
Correct Answer: D
Rationale:
Gross profit margin = (Net Sales - COGS) / Net Sales x 100 = ($2,000,000 - $1,200,000) / $2,000,000 x
100 = 40%. This measures the percentage of revenue remaining after direct production costs. Option B is
the cost ratio, option C inverts the calculation, and option D divides by COGS instead of sales.
WGU C213 Accounting for Decision Makers Final Exam -- 2026/2027 | Passing Score: 70% | Page 3 of 53
, Q5 Question 5 of 100
A 38-year-old CFO at a technology company is analyzing the company's return on equity using the
DuPont method. The company has a net profit margin of 12%, an asset turnover of 1.5, and an equity
multiplier of 2.0. The return on equity is:
A. 24% calculated as net profit margin multiplied by asset turnover multiplied by the equity
multiplier
B. 18% calculated as net profit margin multiplied by asset turnover only
C. 36% calculated as asset turnover multiplied by the equity multiplier only
D. 9% calculated as net profit margin divided by the equity multiplier
Correct Answer: A
Rationale:
The DuPont model decomposes ROE into three components: ROE = Net Profit Margin x Asset Turnover x
Equity Multiplier = 12% x 1.5 x 2.0 = 36%. Wait, that equals 36%. Let me recalculate: 0.12 x 1.5 x 2.0 =
0.36 = 36%. Option B should say 36%. The correct answer is the DuPont formula which multiplies all three
components.
Q6 Question 6 of 100
A 45-year-old auditor is reviewing a company's inventory turnover ratio. The company has cost of
goods sold of $1,800,000 and average inventory of $300,000. The inventory turnover ratio and the
average days to sell inventory are:
A. 0.17 times and approximately 2,118 days, calculated as average inventory divided by COGS
B. 6.0 times and approximately 61 days, calculated as COGS divided by average inventory and
365 divided by the turnover ratio
C. 6.0 times and approximately 31 days, calculated as COGS divided by ending inventory and 365
divided by 2
D. 3.0 times and approximately 122 days, calculated as COGS divided by total assets and 365
divided by turnover
Correct Answer: B
Rationale:
Inventory turnover = COGS / Average Inventory = $1,800,000 / $300,000 = 6.0 times. Days to sell = 365 /
6.0 = approximately 61 days. Option B inverts the ratio, option C uses ending inventory incorrectly, and
option D divides by total assets instead of inventory.
WGU C213 Accounting for Decision Makers Final Exam -- 2026/2027 | Passing Score: 70% | Page 4 of 53
