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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. 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) -$325,000
C) -$280,000
D) -$310,000

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

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

3. Which source of cash is the best indicator of a firm's viability as an ongoing concern?

A) Cash from financing activities
B) Cash from production activities
C) Cash from operating activities
D) Cash from investing activities

4. Which role do ethical standards have in management accounting?

A) To provide the management accountant with the ability to work with only companies that follow strict ethical principles
B) To prevent all unethical behavior of anyone the management accountant may work with
C) To provide the management accountant with the ability to know whether a person will act ethically or not
D) To guide the resolution to possible ethical dilemmas that the managerial accountant may encounter

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

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

Solutions: