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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:
1. Which formula yields a cash times interest earned ratio of 11?
A) Cash before interest and taxes of $11,000 / cash paid for acquisitions of $1,000
B) Cash before interest and taxes of $11,000 / cash paid for income taxes of $1,000
C) Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
D) Cash before interest and taxes of $11,000 / cash from operations of $1,000
2. A company presently uses traditional volume-based costing to allocate overhead to its products.
The following table provides information on two of the company's products:
Product A
Product B
Selling price
$8
$12
Direct material
$2
$3
Direct labor
$1
$2
Applied overhead
$3
$4
Gross margin
$2
$3
Overhead that would be applied to Product A would increase to $8 per unit after identifying cost pools and cost drivers, and the overhead applied to Product B would drop to $2 per unit .
How would this change in the way overhead is allocated affect the selling price of both products?
A) The price of Product A would decrease, and the price of Product B would increase
B) The price of neither product would change
C) The price of Product A would increase, and the price of Product B would increase
D) The price of Product A would increase, and the price of Product B would decrease
3. 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) -$310,000
B) -$55,000
C) -$325,000
D) -$280,000
4. Which events represent financial information recorded in the accounting system of a business?
A) Personal events of each business owner during a year
B) Business events that have already occurred
C) Personal events of each business owner that are likely to occur in the future
D) Business events that are likely to occur in the future
5. During the year, a company purchased goods on a credit basis for its supplies of $750.
What would be the impact on the accounting equation and financial statement?
A) Increase in assets by $750 and decrease in liability by $750
B) Decrease in assets by $750 and decrease in liability by $750
C) Decrease in assets by $750 and increase in liability by $750
D) Increase in assets by $750 and increase in liability by $750
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: D |






