Page 1 of 106
ACCOUNTING FOR DECISION MAKERS
WGU C213 EXAM QUESTIONS AND ANSWERS
2025/2026 LATEST UPDATE
Balance sheet, income statement, and statement of cash flows -- ANSWER--The
financial statement includes what 3 documents
Balance Sheet -- ANSWER--Point in time, Assets (resources) and liabilities
(obligations)
Income Statement -- ANSWER--Period of time (usually 1 year), amount of
profit made
Statement of Cash flows -- ANSWER--Period of time, where money came from,
and where it went. Inflow and outflow of cash (Cash Flows). Change in money
for the period.
Balance sheet equation -- ANSWER--Assets= liabilities + equity
Revenue equation -- ANSWER--Net income=Revenue - Expenses
, Page 2 of 106
USA congress->SEC->FASB -- ANSWER--Financial accounting rule per the
US constitution
FASB: Financial accounting standards board -- ANSWER--The SEC created the
GAAP (has no legal authority) -- ANSWER--FASB created
AIPCA: American INSTITUTE of certified public accountants. -- ANSWER--
What sets auditory standards, continue education credits, CPA exam, and is the
code of professional conduct?
Only CPA's: Certified public accountants. -- ANSWER--Who is the only person
who can sign audit reports?
PCAOB: Public company accounting oversight board. -- ANSWER--The
Sarbanes-Oxley Act "SOX" created?
Under supervision of the SEC. -- ANSWER--PCAOB is under supervision of?
Operating, investing, and financial activities -- ANSWER--The statement of
cash flows includes what three activities
pg. 2
, Page 3 of 106
FASB: Financial accounting standards. Private, no government involvement. It
is a public process, includes individuals experienced in business and accounting
(7 members). -- ANSWER--The decision makers in the U.S. (accounting rules)
GAAP: General accepted accounting principles -- ANSWER--Developed by
accounting rule makers. No Legal authority.
comparability -- ANSWER--We need accounting rules for...
SEC: Security and exchange commission. Located in Article 1, Sec 8, Clause 3 -
- ANSWER-U.S. gov agency responsible for ensuring that investors, creditors,
and other financial statement users are provided with reliable information. It
watches behavior in financial markets.
Registration statements (prospectus), Form 10-K, Form 10-Q, and schedule 14A
(proxy statement). These are all publicly viewable. -- ANSWER--What forms
do the SEC regulate?
Oversees stock exchanges, can suspend a company, investigate and suspect
violations of the SEC rules. -- ANSWER--What does the SEC do?
, Page 4 of 106
YES. The SEC has legal authority to establish accounting rules and disclosure
requirements. - ANSWER--Does the SEC have legal authority?
1. Prepare 2. Analyze 3. Gather 4. Make decisions 5. Implement 6. Observe. --
ANSWER-Accounting steps.
Inside, Internal -- ANSWER--Managerial info is inside or outside the business?
True. Financial accounting is only outside. Managerial accounting can be inside
AND outside. -- ANSWER--True or false, managerial accounting uses BOTH
managerial and financial accounting?
Outside, External, includes lenders and investors -- ANSWER--Financial is
inside or outside the business?
PCAOB: Public Company Accounting OVERSIGHT Board. -- ANSWER--Who
appoints members, approves actions, gov standards, inspections, and
investigations? It is a private group and OVERSEES. AUDITORS?
U.S. Gov agency that collects and regulates income taxes. Their primary goal is
to collect revenue. -- ANSWER--IRS
pg. 4
ACCOUNTING FOR DECISION MAKERS
WGU C213 EXAM QUESTIONS AND ANSWERS
2025/2026 LATEST UPDATE
Balance sheet, income statement, and statement of cash flows -- ANSWER--The
financial statement includes what 3 documents
Balance Sheet -- ANSWER--Point in time, Assets (resources) and liabilities
(obligations)
Income Statement -- ANSWER--Period of time (usually 1 year), amount of
profit made
Statement of Cash flows -- ANSWER--Period of time, where money came from,
and where it went. Inflow and outflow of cash (Cash Flows). Change in money
for the period.
Balance sheet equation -- ANSWER--Assets= liabilities + equity
Revenue equation -- ANSWER--Net income=Revenue - Expenses
, Page 2 of 106
USA congress->SEC->FASB -- ANSWER--Financial accounting rule per the
US constitution
FASB: Financial accounting standards board -- ANSWER--The SEC created the
GAAP (has no legal authority) -- ANSWER--FASB created
AIPCA: American INSTITUTE of certified public accountants. -- ANSWER--
What sets auditory standards, continue education credits, CPA exam, and is the
code of professional conduct?
Only CPA's: Certified public accountants. -- ANSWER--Who is the only person
who can sign audit reports?
PCAOB: Public company accounting oversight board. -- ANSWER--The
Sarbanes-Oxley Act "SOX" created?
Under supervision of the SEC. -- ANSWER--PCAOB is under supervision of?
Operating, investing, and financial activities -- ANSWER--The statement of
cash flows includes what three activities
pg. 2
, Page 3 of 106
FASB: Financial accounting standards. Private, no government involvement. It
is a public process, includes individuals experienced in business and accounting
(7 members). -- ANSWER--The decision makers in the U.S. (accounting rules)
GAAP: General accepted accounting principles -- ANSWER--Developed by
accounting rule makers. No Legal authority.
comparability -- ANSWER--We need accounting rules for...
SEC: Security and exchange commission. Located in Article 1, Sec 8, Clause 3 -
- ANSWER-U.S. gov agency responsible for ensuring that investors, creditors,
and other financial statement users are provided with reliable information. It
watches behavior in financial markets.
Registration statements (prospectus), Form 10-K, Form 10-Q, and schedule 14A
(proxy statement). These are all publicly viewable. -- ANSWER--What forms
do the SEC regulate?
Oversees stock exchanges, can suspend a company, investigate and suspect
violations of the SEC rules. -- ANSWER--What does the SEC do?
, Page 4 of 106
YES. The SEC has legal authority to establish accounting rules and disclosure
requirements. - ANSWER--Does the SEC have legal authority?
1. Prepare 2. Analyze 3. Gather 4. Make decisions 5. Implement 6. Observe. --
ANSWER-Accounting steps.
Inside, Internal -- ANSWER--Managerial info is inside or outside the business?
True. Financial accounting is only outside. Managerial accounting can be inside
AND outside. -- ANSWER--True or false, managerial accounting uses BOTH
managerial and financial accounting?
Outside, External, includes lenders and investors -- ANSWER--Financial is
inside or outside the business?
PCAOB: Public Company Accounting OVERSIGHT Board. -- ANSWER--Who
appoints members, approves actions, gov standards, inspections, and
investigations? It is a private group and OVERSEES. AUDITORS?
U.S. Gov agency that collects and regulates income taxes. Their primary goal is
to collect revenue. -- ANSWER--IRS
pg. 4
