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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Which user group of financial statements evaluates the ability to repay loans?

A) Investors
B) Lenders
C) Management
D) Suppliers

2. A company's statement of cash flows includes the following cash transactions.
Sales = $1,250,000
Inventory purchase = -$750,000
Property and equipment purchase = -$280,000
Interest payment on long-term debt = -$25,000
Payment of wages = -$315,000
Payment of rent = -$40,000
Borrowing long-term debt = $200,000
Payment of cash dividends = -$15,000
Repurchase of treasury stock = -$40,000
Total cash flows = -$5,000
What is the total cash flow from investing activities?

A) -$55,000
B) -$310,000
C) -$325,000
D) -$280,000

3. How are activity-based costing systems different from traditional costing systems?

A) Activity-based costing systems are based on a single cost driver and traditional costing systems are based on multiple cost drivers
B) Activity-based costing systems are used with homogeneous products while traditional costing systems are used with heterogeneous products
C) Activity-based costing systems require less time and expense to administer than traditional costing systems
D) Activity-based costing systems provide a more precise assignment of overhead costs when multiple products are manufactured than traditional costing systems do

4. Which item is an operating activity under a U.S. generally accepted accounting principles (GAAP) statement of cash flows?

A) Cash receipts for the sale of plant assets
B) Cash receipts from the sale of a business segment
C) Cash payments for administration expenses
D) Cash payments for purchase of plant assets

5. A company manufactures leather products and has recently switched to the activity-based costing (ABC) method. It needs to determine the cost of its leather wallets. The company is already aware of its DM and DL costs.
What is the first step to calculating the cost of the product?

A) Calculate G & A
B) Double check the DM & DL calculations
C) Identify overhead cost activities
D) Assign overhead costs

Solutions: