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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. In September, an airline using accrual accounting received cash from a round-trip ticket sold to a customer for
$1,500. The ticket allowed the customer to fly from Denver to Hawaii in October and from Hawaii back to Denver in November.
When should the airline recognize revenue?

A) In September, October, and November
B) Only in November
C) In October and November
D) Only in September

2. What does it mean if a company has a debt ratio of 101.5%?

A) The company has 1.5% more total liabilities than gross sales
B) The company has 1.5% more current liabilities than current assets
C) The company has 1.5% more total liabilities than net income
D) The company has 1.5% more total liabilities than total assets

3. What purpose do the notes within financial statements serve to the Financial Accounting Standards Board?

A) Disclosing financial statistics
B) Summarizing totals of financial statements
C) Providing a summary of accounting policies
D) Providing supplementary information as needed

4. The following list provides partial financial information for a company.
Financial Category | 20X3 | 20X2
Net income | $3,540 | ?
Cash from operations | $4,417 | ?
Cash paid for capital expenditures | $5,613 | ?
Cash paid for acquisitions | $5,964 | ?
Cash paid for interest | $2,782 | ?
Cash paid for income taxes | $2,860 | ?
What is the cash flow to net income ratio for this company in 20X2?

A) 2.45
B) 1.80
C) 1.35
D) -0.01

5. Which ratio provides a measure of how well a company turns sales into profits?

A) Return on expenses
B) Return on profit
C) Return on sales
D) Return on costs

Solutions: