WGU D774 Intro to Business Accounting | OA | Objective Assessment | 2026 Update | 100% Correct|| Questions and Well Detailed Answers Plus Rationales

WGU D774 Intro to Business Accounting
| OA | Objective Assessment | 2026 Update | 100%
Correct|| Questions and Well Detailed Answers
Plus Rationales


1. What is the primary purpose of accounting?
r r r r r r




A. To calculate taxes
r r




B. To record financial transactions
r r r




C. To provide financial information for decision-making
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D. To track employee performance
r r r




Answer: C r




Rationale: Accounting’s main purpose is to provide useful financial information to
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internal and external users for decision-making.
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2. Which of the following is an internal user of accounting information?
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A. Investor
B. Creditor
C. Manager
D. Government agency r




Answer: C r




Rationale: Managers use accounting information internally to plan, control, and evaluate
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business operations.
r r




3. Financial accounting focuses primarily on: r r r r




A. Future projections r




B. Internal decision-making r




C. External reporting r




D. Budget preparation r




Answer: C r




Rationale: Financial accounting prepares reports for external users such as investors and
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creditors.
r

,4. Managerial accounting differs from financial accounting because it:
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A. Follows GAAP r




B. Is required by law
r r r




C. Focuses on internal users r r r




D. Produces audited statements r r




Answer: C r




Rationale: Managerial accounting is used internally and is not bound by GAAP.
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Accounting Principles & Assumptions r r r




5. The business entity assumption means:
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A. The business is separate from its owner
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B. The business will last forever
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C. All transactions are recorded at market value
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D. Only cash transactions are recorded
r r r r




Answer: A r




Rationale: Business finances must be kept separate from personal finances.
r r r r r r r r r




6. Which principle states that accounting records assume the business will
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continue operating?
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A. Cost principle r




B. Revenue recognition principle r r




C. Going concern assumption r r




D. Matching principle r




Answer: C r




Rationale: The going concern assumption assumes the business will remain operational
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into the foreseeable future.
r r r r




7. Under the cost principle, assets are recorded at:
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A. Market value r




B. Replacement cost r




C. Historical cost r




D. Selling price r

,Answer: C
r




Rationale: Assets are recorded at their original purchase price.
r r r r r r r r

, 8. The revenue recognition principle requires revenue to be recorded when:
r r r r r r r r r




A. Cash is received r r




B. Expenses are paid r r




C. Revenue is earned r r




D. The customer places an order
r r r r




Answer: C r




Rationale: Revenue is recorded when it is earned, regardless of cash flow.
r r r r r r r r r r r




9. The matching principle requires that:
r r r r




A. Assets equal liabilities r r




B. Expenses be matched with revenues r r r r




C. Cash equals profit r r




D. Revenue be recorded first r r r




Answer: B r




Rationale: Expenses should be recorded in the same period as the revenues they help
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generate.
r




The Accounting Equation
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10. The basic accounting equation is:
r r r r



A. Assets = Revenue − Expenses r r r r



B. Assets = Liabilities + Equity r r r r




C. Assets + Liabilities = Equity r r r r




D. Revenue = Expenses r r




Answer: B r




Rationale: This equation is the foundation of all accounting systems.
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11. If total assets are $100,000 and total liabilities are $40,000, equity equals:
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A. $60,000
B. $140,000
C. $40,000
D. $100,000