Accounting-for-Decision-Makers Exam Dumps : WGU Accounting for Decision Makers C213 VAC2

The correct answer is D. $152,500 . To find October cash payments , include the portions of purchases paid in October from three different months:

15% of August purchases

35% of September purchases

50% of October purchases

Now calculate each amount:

15% of August ($75,000) = $11,250

35% of September ($225,000) = $78,750

50% of October ($125,000) = $62,500

Now add them:

$11,250 + $78,750 + $62,500 = $152,500

This is the total forecasted cash payment for October under the company’s payment pattern. Budgeted cash disbursement questions often require tracking the timing of payments across multiple months, not just the current month’s purchases.

Option B includes only 50% of October purchases. Option C includes only 35% of September purchases. Option A includes only part of the earlier-month carryover. Since October cash payments must include all three applicable portions, the correct total is $152,500 , making Option D the right answer.

The correct answers are C. Interest expense and D. Cost of goods sold . Net income is determined by starting with revenues and then subtracting expenses and other costs. Because interest expense is an expense, increasing it reduces earnings before tax and therefore lowers net income. Likewise, cost of goods sold (COGS) is a major expense directly tied to the goods sold by the business. When COGS increases, gross profit falls, which then reduces net income. OpenStax summarizes the income statement as including revenues, expenses, gains, and losses in arriving at net income or net loss.

Options A. Gains and B. Revenues are incorrect because increases in either of those items generally increase net income rather than decrease it. Gains arise from peripheral transactions and still improve profitability, while revenues represent inflows from the company’s main operations. In contrast, both interest expense and cost of goods sold are deductions in the income statement. Therefore, the two items that decrease net income when increased are Interest expense and Cost of goods sold .

Accounting systems record business events that have already occurred , not events that may happen in the future and not the personal activities of owners. This is why Option B is correct. In financial accounting, recorded information must be based on identifiable, measurable, and supportable transactions or events, such as sales made, expenses incurred, assets purchased, liabilities created, or cash received and paid. Accounting information is primarily historical in nature, which improves reliability and allows users to evaluate what actually happened in the business.

Option A is incorrect because future business events are forecasts or estimates, not recorded transactions unless a present accounting event already exists, such as an accrued expense. Options C and D are also incorrect because personal events of the owners are not part of the business accounting records unless they directly affect the business entity, for example, owner investment or owner withdrawals. Under the business entity concept, the business is accounted for separately from its owners. Therefore, only completed business transactions and relevant economic events belonging to the business are recorded in the accounting system.