WGU D196 Exam Prep 2026 |
Complete Accounting Study
Guide + Practice Questions
1. For accounting purposes a transaction is
the hiring and firing of an employee
All of the above are accounting transactions
any business event which changes one of the accounting
elements
any business event involving exchange of money
2. On the Income Statement, Operating Income is calculated as:
Operating Expenses - Other income and expenses
Revenues - Operating Expenses
Revenues - Expenses
Revenue + Expense
3. If a company provides services on credit, how should this event be
recorded in the accounting records?
As a transaction that decreases cash and increases liabilities.
As a non-transaction since no cash is exchanged.
As a transaction that only affects the income statement.
As a transaction that increases accounts receivable and
revenue.
4. Which of following is true about an accounting system?
,measures business activity.
, communicates the results to decision makers.
processes information into reports.
All of the above
5. What is the formula for calculating operating income from financial
statements?
Operating Income = Gross Profit - Non-operating Expenses
Operating Income = Total Assets - Total Liabilities
Operating Income = Revenue - Operating Expenses
Operating Income = Net Income + Taxes
6. What are the two components of the accounting equation that are
affected when a company sells a product on account?
Assets and Equity
Liabilities and Equity
Revenue and Expenses
Assets and Liabilities
7. Which factor should be considered when preparing a production
budget?
Desired supplier cash payment schedule
Desired payroll tax strategy
Desired amount of income for the period
Desired amount of ending inventory
8. Describe how selling a product on account impacts the accounting
equation.
, Selling a product on account decreases assets and increases
expenses.
Selling a product on account decreases liabilities and increases
cash.
Selling a product on account increases assets (accounts
receivable) and increases equity (revenue).
Selling a product on account has no effect on the accounting
equation.
9. The set of standards that govern accounting in the United States are
known as __ _.
Certified Public Accountant Standards
the Financial Accounting Standards Board
the Securities and Exchange Commission
Generally Accepted Accounting Principles
10. Describe how discrepancies in a company's tax filings can impact its
relationship with the IRS.
Discrepancies can improve the company's reputation with the
IRS.
Discrepancies are usually ignored by the IRS unless they are
significant.
Discrepancies can lead to audits and penalties, affecting the
company's compliance status.
Discrepancies only affect the company's internal accounting
practices.
11. What is the primary role of accountants in relation to business activities?
Only communicate results
Complete Accounting Study
Guide + Practice Questions
1. For accounting purposes a transaction is
the hiring and firing of an employee
All of the above are accounting transactions
any business event which changes one of the accounting
elements
any business event involving exchange of money
2. On the Income Statement, Operating Income is calculated as:
Operating Expenses - Other income and expenses
Revenues - Operating Expenses
Revenues - Expenses
Revenue + Expense
3. If a company provides services on credit, how should this event be
recorded in the accounting records?
As a transaction that decreases cash and increases liabilities.
As a non-transaction since no cash is exchanged.
As a transaction that only affects the income statement.
As a transaction that increases accounts receivable and
revenue.
4. Which of following is true about an accounting system?
,measures business activity.
, communicates the results to decision makers.
processes information into reports.
All of the above
5. What is the formula for calculating operating income from financial
statements?
Operating Income = Gross Profit - Non-operating Expenses
Operating Income = Total Assets - Total Liabilities
Operating Income = Revenue - Operating Expenses
Operating Income = Net Income + Taxes
6. What are the two components of the accounting equation that are
affected when a company sells a product on account?
Assets and Equity
Liabilities and Equity
Revenue and Expenses
Assets and Liabilities
7. Which factor should be considered when preparing a production
budget?
Desired supplier cash payment schedule
Desired payroll tax strategy
Desired amount of income for the period
Desired amount of ending inventory
8. Describe how selling a product on account impacts the accounting
equation.
, Selling a product on account decreases assets and increases
expenses.
Selling a product on account decreases liabilities and increases
cash.
Selling a product on account increases assets (accounts
receivable) and increases equity (revenue).
Selling a product on account has no effect on the accounting
equation.
9. The set of standards that govern accounting in the United States are
known as __ _.
Certified Public Accountant Standards
the Financial Accounting Standards Board
the Securities and Exchange Commission
Generally Accepted Accounting Principles
10. Describe how discrepancies in a company's tax filings can impact its
relationship with the IRS.
Discrepancies can improve the company's reputation with the
IRS.
Discrepancies are usually ignored by the IRS unless they are
significant.
Discrepancies can lead to audits and penalties, affecting the
company's compliance status.
Discrepancies only affect the company's internal accounting
practices.
11. What is the primary role of accountants in relation to business activities?
Only communicate results
