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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Last year, X Corporation had sales of $500,000 and total expenses of $300,000. A manager of the company is entitled to get a sales commission of 10% of net profit.
What amount of sales commission is to be recognized at year-end?

A) $10,000
B) $50,000
C) $20,000
D) $30,000

2. What is a significant role of the U.S. Securities and Exchange Commission (SEC) in financial reporting?

A) The SEC provides representation and training to controllers of public companies
B) The SEC supports company management and boards of directors in the effective discharge of their responsibilities
C) The SEC ensures that financial statement users are provided with reliable information to use in decision- making
D) The SEC ensures that auditors have the resources and information necessary to provide valuable professional services

3. Under the Sarbanes-Oxley Act, which requirement must an accounting firm that audits public companies meet?

A) The firm cannot audit a company for more than five years
B) The firm cannot provide several nonaudit services such as internal audit outsourcing to its audit clients
C) The firm cannot be retained only by the CFO
D) The firm cannot use any forms of advertising to obtain new audit clients

4. How does management accounting differ from financial accounting?

A) Management accounting is restricted to providing financial rather than nonfinancial data
B) Management accounting presents an unbiased view of a company's economic performance
C) Management accounting is used primarily for internal planning, control, and evaluation
D) Management accounting is not used to gain a competitive advantage in the marketplace

5. 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) $152,500
C) $18,750
D) $62,500

Solutions: