WGU D774 Introduction to Business
Accounting Terms questions and answers
2026\2027 A+ Grade
Accounting
- correct answer The process of organizing, analyzing, and communicating financial information to
support decision-making
Accrual Accounting
- correct answer An accounting method that records revenues and expenses when they are earned or
incurred, not when cash changes hands.
Accounting Equation
- correct answer The formula Assets = Liabilities + Equity, which underpins the balance sheet.
Assets
- correct answer Resources owned by a business that have value and can generate future benefit.
Assurance
- correct answer Independent verification that financial information or internal controls are reliable and
comply with relevant standards.
Auditor
- correct answer A professional who examines financial records and controls to assess accuracy and
compliance.
Balance Sheet
- correct answer A snapshot of a company's financial position at a given time, showing assets, liabilities,
and equity.
, Break-Even Point
- correct answer The level of sales at which total revenue equals total costs, resulting in neither profit
nor loss.
Budget Creep
- correct answer The gradual increase in a budget over time due to repeated small increases that go
unchallenged.
Budget Variance
- correct answer The difference between what was budgeted and what actually occurred in financial
performance.
Budgeting
- correct answer The process of planning and managing income and expenses over a specific period to
meet financial goals.
Continuing Professional Education
- correct answer Educational activities that professionals engage in to maintain, improve, and expand
their skills and knowledge within their field.
Contribution Margin
- correct answer The amount remaining from sales revenue after variable costs are deducted; used to
cover fixed costs and contribute to profit.
Conversion Costs
- correct answer The sum of direct labor and manufacturing overhead; costs involved in converting
materials to finished goods.
Cost Center
- correct answer A department or function that incurs costs but does not directly generate revenue.
Cost Efficiency
- correct answer The ability to achieve desired outcomes with minimal expense, often a goal of zero-
based budgeting.
Accounting Terms questions and answers
2026\2027 A+ Grade
Accounting
- correct answer The process of organizing, analyzing, and communicating financial information to
support decision-making
Accrual Accounting
- correct answer An accounting method that records revenues and expenses when they are earned or
incurred, not when cash changes hands.
Accounting Equation
- correct answer The formula Assets = Liabilities + Equity, which underpins the balance sheet.
Assets
- correct answer Resources owned by a business that have value and can generate future benefit.
Assurance
- correct answer Independent verification that financial information or internal controls are reliable and
comply with relevant standards.
Auditor
- correct answer A professional who examines financial records and controls to assess accuracy and
compliance.
Balance Sheet
- correct answer A snapshot of a company's financial position at a given time, showing assets, liabilities,
and equity.
, Break-Even Point
- correct answer The level of sales at which total revenue equals total costs, resulting in neither profit
nor loss.
Budget Creep
- correct answer The gradual increase in a budget over time due to repeated small increases that go
unchallenged.
Budget Variance
- correct answer The difference between what was budgeted and what actually occurred in financial
performance.
Budgeting
- correct answer The process of planning and managing income and expenses over a specific period to
meet financial goals.
Continuing Professional Education
- correct answer Educational activities that professionals engage in to maintain, improve, and expand
their skills and knowledge within their field.
Contribution Margin
- correct answer The amount remaining from sales revenue after variable costs are deducted; used to
cover fixed costs and contribute to profit.
Conversion Costs
- correct answer The sum of direct labor and manufacturing overhead; costs involved in converting
materials to finished goods.
Cost Center
- correct answer A department or function that incurs costs but does not directly generate revenue.
Cost Efficiency
- correct answer The ability to achieve desired outcomes with minimal expense, often a goal of zero-
based budgeting.
