WGU D774 Pre-Assessment (PDF) | [2026] Exam
Questions | Study Guide
Introduction
Welcome b.to b.the b.WGU b.D774 b.Pre-Assessment b.practice b.test. b.This b.exam b.simulates
b.the b.content, b.difficulty, b.and b.structure b.of b.the b.actual b.WGU b.D774 b.Introduction b.to
b.Business b.Accounting b.Objective b.Assessment. b.It b.covers b.financial b.accounting,
b.managerial b.accounting, b.budgeting, b.cost b.classification, b.internal b.controls, b.and
b.financial b.statement b.analysis. b.Use b.these b.D774 b.exam b.questions b.to b.assess b.your
b.knowledge b.and b.identify b.weak b.areas b.before b. test b.day. b.Each b.question b.includes b.a
b.detailed b.rationale b.explaining b.why b.the b.correct b.answer b.is b.right b.and b.why b.the b.other
b.options b.are b.incorrect.
Topic 1: The Accounting Equation & Financial
b. b. b. b. b. b.
Statements
b.
1. b.What b.is b.the b.fundamental b.accounting b.equation?
A) b.Assets b.= b.Liabilities b.- b.Owner's b.Equity
B) b.Assets b.+ b.Liabilities b.= b.Owner's b.Equity
C) b.Assets b.= b.Liabilities b.+ b.Owner's b.Equity
D) b.Assets b.- b.Owner's b.Equity b.= b.Liabilities
Correct b.Answer: b.C
Rationale: b.The b.accounting b.equation b.is b.Assets b.= b.Liabilities b.+ b.Owner's b.Equity. b.This
b.equation b.must b.always b.remain b.in b.balance b.after b.every b.business b.transaction b..
b.Option b.A b.is b.incorrect b.because b.liabilities b.are b.added b.to b.equity, b.not b.subtracted.
b.Option b.B b.reverses b.the b.relationship. b.Option b.D, b.while b.mathematically b.equivalent b.to
b.C, b.is b.not b.the b.standard b.way b.the b.equation b.is b.presented.
2. b.Which b.financial b.statement b.provides b.a b."snapshot" b.of b.a b.company's
b.financial b.position b.at b.a b.specific b.point b.in b.time?
A) b.Income b.Statement
B) b.Statement b.of b.Cash b.Flows
,C) b.Balance b.Sheet
D) b.Statement b.of b.Retained b.Earnings
Correct b.Answer: b.C
Rationale: b.The b.balance b.sheet b.shows b.assets, b.liabilities, b.and b.equity b.at b.a b.specific
b.date, b.representing b.a b.snapshot b.of b.financial b.position b.. b.The b.income b.statement b.(A)
b.covers b.a b.period b.of b.time. b.The b.statement b.of b.cash b.flows b.(B) b.also b.covers b.a b.period.
b.The b.statement b.of b.retained b.earnings b.(D) b.shows b.changes b.over b.time.
3. b.Which b.items b.are b.used b.to b.compute b.net b.income?
A) b.Assets b.and b.liabilities
B) b.Revenue b.and b.expenses
C) b.Cash b.inflows b.and b.outflows
D) b.Common b.stock b.and b.dividends
Correct b.Answer: b.B
Rationale: b.Net b.income b.is b.calculated b.as b.Revenues b.- b.Expenses b.. b.Assets b.and
b.liabilities b.(A) b.appear b.on b.the b.balance b.sheet. b.Cash b.inflows b.and b.outflows b.(C) b.appear
b.on b.the b.statement b.of b.cash b.flows. b.Common b.stock b.and b.dividends b.(D) b.appear b.in b.the
b.equity b.section.
4. b.What b.is b.the b.correct b.computation b.to b.determine b.a b.company's b.owner's
b.equity?
A) b.Assets b.+ b.Liabilities
B) b.Liabilities b.- b.Assets
C) b.Assets b.- b.Liabilities
D) b.Revenues b.- b.Expenses
Correct b.Answer: b.C
Rationale: b.According b.to b.the b.accounting b.equation b.(Assets b.= b.Liabilities b.+ b.Equity),
b.solving b.for b.equity b.gives b.Assets b.- b.Liabilities b. = b.Owner's b.Equity b..
5. b.Which b.item b.is b.reported b.first b.on b.the b.income b.statement?
A) b.Net b.income
B) b.Expenses
C) b.Revenues
D) b.Gross b.profit
Correct b.Answer: b.C
, Rationale: b.Revenues b.are b.listed b.first b.on b.the b.income b.statement, b.representing b.the
b.total b.income b.earned b.from b.business b.operations b.before b.any b.costs b.are b.deducted b..
6. b.A b.classified b.balance b.sheet b.distinguishes b.between:
A) b.Cash b.and b.credit b.transactions
B) b.Current b.and b.long-term b.assets b.and b.current b.and b.long-term b.liabilities
C) b.Domestic b.and b.international b.operations
D) b.Operating b.and b.financing b.activities
Correct b.Answer: b.B
Rationale: b.A b.classified b.balance b.sheet b.separates b.assets b.and b.liabilities b.into b.current
b.and b.long-term b.categories b.to b.provide b.more b.useful b.information b.about b.liquidity
b.and b.solvency b..
7. b.Which b.financial b.statement b.shows b.how b.net b.income b.impacts b.retained
b.earnings?
A) b.Balance b.Sheet
B) b.Income b.Statement
C) b.Statement b.of b.Retained b.Earnings
D) b.Statement b.of b.Cash b.Flows
Correct b.Answer: b.C
Rationale: b.The b.statement b.of b.retained b.earnings b.shows b.beginning b.retained
b.earnings, b.adds b.net b.income, b.subtracts b.dividends, b.and b.reports b.ending b.retained
b.earnings b..
8. b.How b.does b.net b.income b.impact b.the b.computation b.of b.ending b.retained
b.earnings?
A) b.It b.is b.subtracted
B) b.It b.is b.ignored
C) b.It b.is b.added
D) b.It b.is b.multiplied
Correct b.Answer: b.C
Rationale: b.Net b.income b.increases b.retained b.earnings b.and b.is b.added b.when
b.computing b.ending b.retained b.earnings b.(Beginning b.RE b.+ b.Net b.Income b.- b.Dividends b.=
b.Ending b.RE) b..
9. b.What b.useful b.information b.does b.a b.comparative b.balance b.sheet b.provide?
Questions | Study Guide
Introduction
Welcome b.to b.the b.WGU b.D774 b.Pre-Assessment b.practice b.test. b.This b.exam b.simulates
b.the b.content, b.difficulty, b.and b.structure b.of b.the b.actual b.WGU b.D774 b.Introduction b.to
b.Business b.Accounting b.Objective b.Assessment. b.It b.covers b.financial b.accounting,
b.managerial b.accounting, b.budgeting, b.cost b.classification, b.internal b.controls, b.and
b.financial b.statement b.analysis. b.Use b.these b.D774 b.exam b.questions b.to b.assess b.your
b.knowledge b.and b.identify b.weak b.areas b.before b. test b.day. b.Each b.question b.includes b.a
b.detailed b.rationale b.explaining b.why b.the b.correct b.answer b.is b.right b.and b.why b.the b.other
b.options b.are b.incorrect.
Topic 1: The Accounting Equation & Financial
b. b. b. b. b. b.
Statements
b.
1. b.What b.is b.the b.fundamental b.accounting b.equation?
A) b.Assets b.= b.Liabilities b.- b.Owner's b.Equity
B) b.Assets b.+ b.Liabilities b.= b.Owner's b.Equity
C) b.Assets b.= b.Liabilities b.+ b.Owner's b.Equity
D) b.Assets b.- b.Owner's b.Equity b.= b.Liabilities
Correct b.Answer: b.C
Rationale: b.The b.accounting b.equation b.is b.Assets b.= b.Liabilities b.+ b.Owner's b.Equity. b.This
b.equation b.must b.always b.remain b.in b.balance b.after b.every b.business b.transaction b..
b.Option b.A b.is b.incorrect b.because b.liabilities b.are b.added b.to b.equity, b.not b.subtracted.
b.Option b.B b.reverses b.the b.relationship. b.Option b.D, b.while b.mathematically b.equivalent b.to
b.C, b.is b.not b.the b.standard b.way b.the b.equation b.is b.presented.
2. b.Which b.financial b.statement b.provides b.a b."snapshot" b.of b.a b.company's
b.financial b.position b.at b.a b.specific b.point b.in b.time?
A) b.Income b.Statement
B) b.Statement b.of b.Cash b.Flows
,C) b.Balance b.Sheet
D) b.Statement b.of b.Retained b.Earnings
Correct b.Answer: b.C
Rationale: b.The b.balance b.sheet b.shows b.assets, b.liabilities, b.and b.equity b.at b.a b.specific
b.date, b.representing b.a b.snapshot b.of b.financial b.position b.. b.The b.income b.statement b.(A)
b.covers b.a b.period b.of b.time. b.The b.statement b.of b.cash b.flows b.(B) b.also b.covers b.a b.period.
b.The b.statement b.of b.retained b.earnings b.(D) b.shows b.changes b.over b.time.
3. b.Which b.items b.are b.used b.to b.compute b.net b.income?
A) b.Assets b.and b.liabilities
B) b.Revenue b.and b.expenses
C) b.Cash b.inflows b.and b.outflows
D) b.Common b.stock b.and b.dividends
Correct b.Answer: b.B
Rationale: b.Net b.income b.is b.calculated b.as b.Revenues b.- b.Expenses b.. b.Assets b.and
b.liabilities b.(A) b.appear b.on b.the b.balance b.sheet. b.Cash b.inflows b.and b.outflows b.(C) b.appear
b.on b.the b.statement b.of b.cash b.flows. b.Common b.stock b.and b.dividends b.(D) b.appear b.in b.the
b.equity b.section.
4. b.What b.is b.the b.correct b.computation b.to b.determine b.a b.company's b.owner's
b.equity?
A) b.Assets b.+ b.Liabilities
B) b.Liabilities b.- b.Assets
C) b.Assets b.- b.Liabilities
D) b.Revenues b.- b.Expenses
Correct b.Answer: b.C
Rationale: b.According b.to b.the b.accounting b.equation b.(Assets b.= b.Liabilities b.+ b.Equity),
b.solving b.for b.equity b.gives b.Assets b.- b.Liabilities b. = b.Owner's b.Equity b..
5. b.Which b.item b.is b.reported b.first b.on b.the b.income b.statement?
A) b.Net b.income
B) b.Expenses
C) b.Revenues
D) b.Gross b.profit
Correct b.Answer: b.C
, Rationale: b.Revenues b.are b.listed b.first b.on b.the b.income b.statement, b.representing b.the
b.total b.income b.earned b.from b.business b.operations b.before b.any b.costs b.are b.deducted b..
6. b.A b.classified b.balance b.sheet b.distinguishes b.between:
A) b.Cash b.and b.credit b.transactions
B) b.Current b.and b.long-term b.assets b.and b.current b.and b.long-term b.liabilities
C) b.Domestic b.and b.international b.operations
D) b.Operating b.and b.financing b.activities
Correct b.Answer: b.B
Rationale: b.A b.classified b.balance b.sheet b.separates b.assets b.and b.liabilities b.into b.current
b.and b.long-term b.categories b.to b.provide b.more b.useful b.information b.about b.liquidity
b.and b.solvency b..
7. b.Which b.financial b.statement b.shows b.how b.net b.income b.impacts b.retained
b.earnings?
A) b.Balance b.Sheet
B) b.Income b.Statement
C) b.Statement b.of b.Retained b.Earnings
D) b.Statement b.of b.Cash b.Flows
Correct b.Answer: b.C
Rationale: b.The b.statement b.of b.retained b.earnings b.shows b.beginning b.retained
b.earnings, b.adds b.net b.income, b.subtracts b.dividends, b.and b.reports b.ending b.retained
b.earnings b..
8. b.How b.does b.net b.income b.impact b.the b.computation b.of b.ending b.retained
b.earnings?
A) b.It b.is b.subtracted
B) b.It b.is b.ignored
C) b.It b.is b.added
D) b.It b.is b.multiplied
Correct b.Answer: b.C
Rationale: b.Net b.income b.increases b.retained b.earnings b.and b.is b.added b.when
b.computing b.ending b.retained b.earnings b.(Beginning b.RE b.+ b.Net b.Income b.- b.Dividends b.=
b.Ending b.RE) b..
9. b.What b.useful b.information b.does b.a b.comparative b.balance b.sheet b.provide?
