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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. 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) $152,500
B) $78,750
C) $18,750
D) $62,500

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. Which user group of financial statements evaluates the ability to repay loans?

A) Management
B) Investors
C) Lenders
D) Suppliers

4. A corporation has liabilities and owners' equity of $100 million and $40 million respectively. What is the amount of the asset balance in this case?

A) $140 million
B) $25 million
C) $80 million
D) $60 million

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) Decrease in assets by $750 and decrease in liability by $750
B) Increase in assets by $750 and increase in liability by $750
C) Increase in assets by $750 and decrease in liability by $750
D) Decrease in assets by $750 and increase in liability by $750

Solutions: