WGU C213 Pre- Assessment Accounting for Decision Makers 2023\/ 2024 Exam |Actual Questions and Verified Answers | A Grade<\/p>\n\n\n\n
WGU C213 Pre- Assessment Accounting for
Decision Makers 2023\/ 2024 Exam |Actual
Questions and Verified Answers | A Grade
Q: A furniture company using accrual accounting purchased 20 sofas in November 2011. In
December 2011, 8 of the 20 sofas were sold to customers. The customers all signed contracts
agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012.
At the time of sale, the company was reasonably sure the customers would pay the amount owed.
The furniture company pays its salespeople a commission on each sofa sold, with commissions
for December 2011 sales paid in January 2012.
The furniture company paid $3,000 for advertising that ran in the local newspaper in November
2011.
In which month should advertising costs be expensed?
Answer:
November 2011
Q: On May 1, 2011, a company using accrual accounting purchased equipment costing
$500,000. It expects the equipment to have a useful life of five years. At the time of purchase,
the company also purchased a one-year insurance policy on this equipment, which cost $6,000.
How much insurance expense should the company have recognized for the year ending in 2011?
Answer:
$4,000
Q: In January of year 1, a company began doing business as a corporation in order to sell
technology-related accessories and services. During its first month of operations, it focused on
obtaining the financing needed to start its operations. In February of year 1, the company sold
inventory costing $25,000 for $75,000 cash.<\/p>\n\n\n\n
In February of year 1, the company provided technology-related services worth $10,000.
Customers paid a total of $4,000 in cash for these services and promised to pay the remainder the
following month.
What will be the total impact of these services provided on the company’s balance sheet other
than an increase in cash of $4,000?
Choose 2 answers
Answer:
Accounts receivable will increase $6,000. Retained earnings will increase $10,000.
Q: What was the 2012 net profit amount if the 2013 pro-forma net profit of $187,000 was based
on a 22% increase?
Answer:
$153,279
Q: What is a common category in a statement of cash flows?
Answer:
Cash from investing activities
Q: Which cash flow category would include “cash received from investors”?
Answer:
Cash from financing activities
Q: Which item is an investing activity?
Answer:
Cash payments for purchase of plant assets<\/p>\n\n\n\n
Q: What impact does the sale of equipment have on the statement of cash flows?
Answer:
Increase in cash from investing activities
Q: What is known about the direct and indirect methods of preparing statements of cash flow?
Answer:
The indirect method is more popular among large U.S. companies
Q: A company’s statement of cash flows includes the following cash transactions:
Sales 1,250,000
Inventory Purchase -750,000
Property and Equipment Purchase -270,000
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
Assuming the company uses US GAAP standards, what is the total cash flow from financing
activities?
Answer:
$145,000
Q: Which two examples represent financial statement errors?
Choose 2 answers
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