WGU Accounting for Decision Makers C213 VAC2 Accounting-for-Decision-Makers Exam Questions

Answer : D

The correct answer is D. The control designed to prevent payment for goods not actually received is the receiving function's preparation of a receiving report, which is then sent to accounts payable and matched against the supplier invoice and purchase order. This is the essence of a three-way match: purchase order, receiving report, and vendor invoice. AccountingTools explains that payables staff should match the supplier invoice to the related purchase order and proof of receipt before authorizing payment.

Option A is helpful for controlling check completeness and sequence, but it does not verify quantities received. Option B adds authorization control over disbursements, but it also does not confirm whether the shipment matched the invoice. Option C helps ensure purchases are approved before ordering, but it still does not prove what was actually delivered. The receiving department's counting and inspection of goods, followed by forwarding the receiving documentation to accounts payable, directly addresses the risk that a supplier invoice includes more items than were received. Therefore, the best internal control is Option D.

Answer : A

The correct answer is A. Stockholders' equity will increase by $900,000. On January 1, the corporation received cash in exchange for issuing stock. That means the company's assets increase because cash increases, and stockholders' equity also increases because ownership shares were issued. OpenStax explains that when a company issues stock for cash or other assets, the asset account increases and the related equity accounts are credited.

Option B is incorrect because no borrowing occurred on January 1, so loan payable does not increase from that event. Option C is incorrect because ''investments'' is not the proper classification for the corporation's own issuance of stock in this context. Option D is incorrect because retained earnings increase from profitable operations over time, not from owner contributions or stock issuances. This transaction is a classic example of the accounting equation staying balanced: Assets increase by $900,000 and Stockholders' Equity increases by $900,000. Therefore, the correct balance sheet effect, along with the rise in cash, is an equal increase in stockholders' equity.

Answer : C

A balance sheet shows the company's financial position at a specific point in time, so Option C is correct. It reports what the business owns (assets), what it owes (liabilities), and usually owners' or stockholders' equity as of a particular date. This is why the balance sheet is often described as a snapshot rather than a report covering a span of time. Authoritative accounting learning materials describe the balance sheet as presenting assets, liabilities, and equity ''as of'' a date or at a specific moment.

Option A is incorrect because revenues and expenses for a period of time belong to the income statement, not the balance sheet. Option D is incorrect because cash collections and cash expenditures for a period of time are presented in the statement of cash flows. Option B is also incorrect because cash inflows and outflows are not reported only at a single point in time; they are summarized over a period. Therefore, the best answer is the one identifying the balance sheet as a statement of assets and liabilities at a specific point in time.

Answer : A

The correct answer is A. Use an objective advisor confidentially. The IMA Statement of Ethical Professional Practice includes guidance for resolving ethical conflict and notes that management accountants may wish to discuss the matter with an objective advisor to obtain a better understanding of possible courses of action. This step is intended to help the accountant evaluate the issue carefully while preserving confidentiality and professionalism.

Option B is not the best answer because going directly to the chief executive officer is not always the first or most appropriate step. Ethical conflict guidance usually recommends following the organization's established chain of command unless the issue involves that level of management. Option C is incorrect because discussing the issue with ''any stakeholder'' could violate confidentiality. Option D is also weaker because consulting a coworker is not the same as seeking advice from an objective and appropriate advisor. The emphasis in professional ethics guidance is on confidentiality, sound judgment, and proper escalation. Therefore, the most suitable action among the options given is to use an objective advisor confidentially, making Option A correct.

Answer : A

The correct answer is A. The key difference is that management accounting is mainly used inside the organization for planning, control, performance evaluation, and decision-making, while financial accounting is aimed primarily at external users such as investors, creditors, and regulators. Management accounting reports are tailored to managers' needs and may include forecasts, budgets, cost analyses, and both financial and nonfinancial information.

Option B is incorrect because management accounting can absolutely help a company gain competitive advantage through pricing, efficiency analysis, budgeting, and strategic decision-making. Option C is misleading because ''an unbiased view of economic performance'' is more closely associated with external financial reporting. Option D is incorrect because management accounting is not restricted to financial data; it often includes nonfinancial measures such as production efficiency, quality metrics, customer behavior, and operational performance. This flexibility is one of its main strengths. Therefore, the best distinction is that management accounting is used primarily for internal planning, control, and evaluation, making Option A correct.

Answer : C

The correct answer is C. Gross profit percentage increased by 4.2%. Gross profit percentage and cost of goods sold percentage are directly related because together they normally total 100% of sales.

Originally:

Gross profit percentage = 100% - 76.8% = 23.2%

After the change:

Gross profit percentage = 100% - 72.6% = 27.4%

Now calculate the increase:

27.4% - 23.2% = 4.2%

So when the cost of goods sold percentage decreased from 76.8% to 72.6%, the gross profit percentage increased by 4.2%.

Option A is incorrect because the question does not provide enough information to determine the change in net profit percentage, which depends on more than cost of goods sold. Operating expenses, interest, and taxes would also affect net profit. Option B is incorrect for the same reason. Option D is the opposite of what actually happened. Since a lower COGS percentage leaves a larger portion of sales as gross profit, the correct conclusion is that gross profit percentage increased by 4.2%, making Option C correct.

Answer : B

The correct answer is B. Easy to reconcile between net income and cash flows. Under the indirect method, the operating section of the statement of cash flows begins with net income and then adjusts for noncash items, gains and losses, and changes in working capital to arrive at net cash provided by operating activities. This makes it especially useful for showing the relationship between accrual-based profit and actual operating cash flow. FASB guidance explains that the indirect method presents this reconciliation within the cash flow reporting process, and OpenStax likewise describes the indirect method as beginning with net income and reconciling it to cash flows.

Option A is incorrect because the direct method is often easier for beginners to read since it lists cash receipts and cash payments more directly. Option C is incorrect because the indirect method does not specifically prevent errors or reveal ''indirect costs.'' Option D is incorrect because the purpose of the method is not to compare direct and indirect costs. Its main practical advantage is the clear reconciliation from net income to operating cash flow, so Option B is correct.