WGU D196 Study Guide Exam with
Actual Detailed Answers 2026
Updated.
What is the effect of a company's accounting department maintaining high ethical standards?
A)The company can hire fewer accountants to do the same amount of work
B)The company can report more favorable results in its financial statements.
C)The company's accounting information will increase in value.
D) The company's accounting information will decrease in value. - Answer C) The company's
accounting information will increase in value.
Why might employees be interested in their company's financial accounting information?
A) Financial statement data provide item-by-item product cost information.
B) Financial statement data are often used in determining employee bonuses.
C) Financial statement data are used to record long term liabilities.
D) Financial statement data provide detailed internal budget information. - Answer Financial
statement data are often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States?
A) International Accounting Standards Board (IASB)
B) Internal Revenue Service (IRS)
C) Financial Accounting Standards Board (FASB)
D) American Institute of Certified Public Accountants (AICPA) - Answer Financial Accounting
Standards Board (FASB)
Which report is one of the three primary financial statements?
,A) Statement of management accounting
B) Statement of the accounting cycle
C) Statement of stakeholder funds
D) Statement of cash flows - Answer Statement of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
A) Assets increase by $5,000; expenses increase by $5,000.
B) Assets decrease by $5,000; revenues increase by $5,000.
C) Assets decrease by $5,000; expenses increase by $5,000.
D) Assets decrease by $5,000; liabilities increase by $5,000. - Answer Assets decrease by
$5,000; expenses increase by $5,000.
What is the transactional model?
A) Two parties exchanging something of value
B) A type of commonly used accounting software
C) A category of merchandiser or retailer
D) An example of an online business document - Answer Two parties exchanging something
of value
A company borrowed $80,000 cash from a bank.
, How does this transaction affect the accounting equation of the borrowing company?
A) Assets increase by $80,000; revenues increase by $80,000.
B) Assets increase by $80,000; liabilities increase by $80,000.
C) Assets increase by $80,000; liabilities decrease by $80,000.
D) Assets increase by $80,000; owners' equity increases by - Answer Assets increase by
$80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
A) Expenses decrease owners' equity.
B) Expenses decrease liabilities.
C) Expenses increase owners' equity.
D) Expenses increase liabilities. - Answer Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
A) Liability
B) Asset
C) Equity
D) Expense - Answer Liability
What is the purpose of the financial accounting cycle?
A) To turn information about transactions into financial statements
Actual Detailed Answers 2026
Updated.
What is the effect of a company's accounting department maintaining high ethical standards?
A)The company can hire fewer accountants to do the same amount of work
B)The company can report more favorable results in its financial statements.
C)The company's accounting information will increase in value.
D) The company's accounting information will decrease in value. - Answer C) The company's
accounting information will increase in value.
Why might employees be interested in their company's financial accounting information?
A) Financial statement data provide item-by-item product cost information.
B) Financial statement data are often used in determining employee bonuses.
C) Financial statement data are used to record long term liabilities.
D) Financial statement data provide detailed internal budget information. - Answer Financial
statement data are often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States?
A) International Accounting Standards Board (IASB)
B) Internal Revenue Service (IRS)
C) Financial Accounting Standards Board (FASB)
D) American Institute of Certified Public Accountants (AICPA) - Answer Financial Accounting
Standards Board (FASB)
Which report is one of the three primary financial statements?
,A) Statement of management accounting
B) Statement of the accounting cycle
C) Statement of stakeholder funds
D) Statement of cash flows - Answer Statement of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
A) Assets increase by $5,000; expenses increase by $5,000.
B) Assets decrease by $5,000; revenues increase by $5,000.
C) Assets decrease by $5,000; expenses increase by $5,000.
D) Assets decrease by $5,000; liabilities increase by $5,000. - Answer Assets decrease by
$5,000; expenses increase by $5,000.
What is the transactional model?
A) Two parties exchanging something of value
B) A type of commonly used accounting software
C) A category of merchandiser or retailer
D) An example of an online business document - Answer Two parties exchanging something
of value
A company borrowed $80,000 cash from a bank.
, How does this transaction affect the accounting equation of the borrowing company?
A) Assets increase by $80,000; revenues increase by $80,000.
B) Assets increase by $80,000; liabilities increase by $80,000.
C) Assets increase by $80,000; liabilities decrease by $80,000.
D) Assets increase by $80,000; owners' equity increases by - Answer Assets increase by
$80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
A) Expenses decrease owners' equity.
B) Expenses decrease liabilities.
C) Expenses increase owners' equity.
D) Expenses increase liabilities. - Answer Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
A) Liability
B) Asset
C) Equity
D) Expense - Answer Liability
What is the purpose of the financial accounting cycle?
A) To turn information about transactions into financial statements
