WGU C213 Pre-Assessment 2025-2026 / Updated Exam
Practice with Verified Answers – PA/OA Ready
Western Governors University
What has had the most significant impact on accounting practices?
Information technology
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?
$350 million
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?
In 2014, a company provides services to a customer for which cash will be collected the next year (2015).
Which category on the statement of cash flows summarizes cash receipts and payments to owners and
creditors of the company?
Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting policies?
In the notes to financial statements
Which assurance does an external audit report provide for its readers?
The company's financial statements fairly reflect its financial position
Reliable
Information that can be verified
Relevant
Information having to do with the matter at hand
Material
Information that is important enough to make a difference
Conservatism
Information related to recognizing losses as they occur
What are steps in the decision cycle?
1 Prepare financial statements.
2 Analyze financial statements.
, 3 Gather information.
4 Make decision.
5 Implement decision.
Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
What is the price-earnings (PE) ratio for this company?
11.0
What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the
same?
Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow?
$6,991/$5,486. $5,220/$1,875.
Which formula yields a cash times interest earned ratio of 11?
Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
Which form of debt should be reported in the long-term liability category?
Notes payable expected to be paid in 18 months
In January of year 1, a company began doing business as a corporation in order to sell technology-related
accessories and services. During its first month of operations, the following events occurred:
January 1
The corporation received $1,000,000 in cash in exchange for stock issued to stockholders.
January 3
The corporation borrowed $250,000 from bank. The loan is a four-year loan with an interest rate of 12
percent, payable each year on January 1 beginning in year 2.
January 5
The corporation purchased equipment to be used in the business for $200,000 cash.
January 8
The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was
put on credit accounts with suppliers.
Practice with Verified Answers – PA/OA Ready
Western Governors University
What has had the most significant impact on accounting practices?
Information technology
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?
$350 million
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?
In 2014, a company provides services to a customer for which cash will be collected the next year (2015).
Which category on the statement of cash flows summarizes cash receipts and payments to owners and
creditors of the company?
Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting policies?
In the notes to financial statements
Which assurance does an external audit report provide for its readers?
The company's financial statements fairly reflect its financial position
Reliable
Information that can be verified
Relevant
Information having to do with the matter at hand
Material
Information that is important enough to make a difference
Conservatism
Information related to recognizing losses as they occur
What are steps in the decision cycle?
1 Prepare financial statements.
2 Analyze financial statements.
, 3 Gather information.
4 Make decision.
5 Implement decision.
Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
What is the price-earnings (PE) ratio for this company?
11.0
What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the
same?
Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow?
$6,991/$5,486. $5,220/$1,875.
Which formula yields a cash times interest earned ratio of 11?
Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
Which form of debt should be reported in the long-term liability category?
Notes payable expected to be paid in 18 months
In January of year 1, a company began doing business as a corporation in order to sell technology-related
accessories and services. During its first month of operations, the following events occurred:
January 1
The corporation received $1,000,000 in cash in exchange for stock issued to stockholders.
January 3
The corporation borrowed $250,000 from bank. The loan is a four-year loan with an interest rate of 12
percent, payable each year on January 1 beginning in year 2.
January 5
The corporation purchased equipment to be used in the business for $200,000 cash.
January 8
The corporation purchased inventory costing $200,000 by paying $120,000 in cash. The remainder was
put on credit accounts with suppliers.
