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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. A company plans to purchase inventory for the second half of a year as follows:
July = $100,000
August = $75,000
September = $225,000
October = $125,000
November = $250,000
December = $30,000
The company usually pays 50% of inventory purchases in the month of purchase, 35% in the following month, and 15% in the second month.
What are the forecasted October cash payments based on this information?

A) $78,750
B) $62,500
C) $18,750
D) $152,500

2. A company collects 20% of the credit sales in the month of sale and the rest is collected equally in the following two months. The company made the following credit sales:
January = $500,000
February = $420,000
March = $545,000
April = $550,000
May = $555,000
June = $567,000
July = $600,000
Which is the correct amount of cash collection in the month of September?

A) $625,000
B) $670,000
C) $624,000
D) $658,000

3. Which two costs would be used to calculate inventory overhead?
Choose 2 answers.

A) Production employee benefits
B) Administrative office electricity costs
C) Administrative employee benefits
D) Factory electricity costs

4. What is an advantage of the indirect method of the cash flow statement?

A) Easy to avoid making mistakes because the method reveals indirect costs
B) Easy to reconcile between net income and cash flows
C) Easy for a novice to decipher operating cash flow information
D) Easy to highlight the difference between direct and indirect costs

5. What is a cost incurred as part of the production process?

A) Sunk cost
B) Period cost
C) Opportunity cost
D) Raw materials cost

Solutions: