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

The correct answer is A. The net income of the company . In financial accounting, the overall economic performance of a company for a specific period is generally summarized by net income or net loss . Net income reflects the result of revenues, expenses, gains, and losses recognized during the period under accrual accounting. It is the bottom-line measure on the income statement and is widely used to evaluate profitability and performance. OpenStax describes the income statement as the report that presents revenues and expenses for a period and arrives at net income.

Option B focuses only on cash receipts and cash payments, which is a cash flow perspective rather than the full accrual-based measure of economic performance. Option C refers more narrowly to gross profit , because it compares sales with cost of goods sold only and excludes operating expenses, interest, and taxes. Option D, market value, reflects investor valuation rather than accounting performance for a reporting period. Since the question asks about the company’s overall economic performance for a given time period, the most accurate accounting answer is net income . Therefore, Option A is correct.

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.

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.