WGU WGU Accounting D774 EXAM
QUESTIONS AND VERIFIED CORRECT
ANSWERS GRADED A+ [LATEST 2026-
2027] 100% GUARANTEED PASS
What is an external audit? Why would a company have an external audit completed? - CORRECT
ANSWER-An audit performed by accountants from outside a company increase the relevance
that users can place on information is the company's financial statements
Who is responsible for the information contained in the financial statements? - CORRECT
ANSWER-Who is responsible for the information contained in the financial statements?
1. The income statement describes a company's _____________________________? -
CORRECT ANSWER-Financial performance for a period of time
The balance sheet reports the company's ________________________________ ? - CORRECT
ANSWER-Financial position at a specific point in time
The statement of cash flows details how a company________________________ ? - CORRECT
ANSWER-Obtained and spent cash during a certain period of time
What information is included in the notes to the financial statements? - CORRECT ANSWER-A
summary of significant accounting policies, additional information doubt about the summary
tools found in the statements, disclosure of important information not recognized in the
statements, supplementing information required by FASB or SEC
,What are the criteria accountants use to determine when to recognize revenue? - CORRECT
ANSWER-Persuasive evidence of an arrangement must exist; delivery must have occurred or
services been rendered, the seller's price to the buyer must be fixed or determinable, and
collectability should be reasonably assured.
Assets - CORRECT ANSWER-probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events
Liabilities - CORRECT ANSWER-Probable future sacrifice of economic benefit arising from a
present obligation of a particular entity to transfer assets or provide services to other entities in
the future as a result of past transactions or events
Owners' Equity - CORRECT ANSWER-Difference between assets and liabilities in a corporation
Retained Earnings - CORRECT ANSWER-the cumulative amount of a corporation profits that
have been reinvested on behalf of the stockholders
Classified Balance Sheet - CORRECT ANSWER-a financial statement with classifications like
current assets and liabilities, long-term liabilities and other things
Current assets - CORRECT ANSWER-Cash, accounts receivable, and inventory
Current liabilities - CORRECT ANSWER-those obligations expected to be paid within one year,
the most common being accounts payable
Long term liabilities - CORRECT ANSWER-Liabilities that are around for awhile
What are the two components of owners' equity? - CORRECT ANSWER-Common Stock
Preferred Stock
, How are the assets and liabilities valued on the balance sheet? - CORRECT ANSWER-Assets are
on the top, and below them are the company's liabilities and shareholders' equity. It is also clear
that this balance sheet is in balance where the value of the assetsequals the combined value of
the liabilities and shareholders' equity.
When a company rents a warehouse by paying for the first six month's rent in advance, the
effect on the accounting equation on the day of payment would be to adjust which accounts? -
CORRECT ANSWER-Pre-paid rent will increase, cash will decrease
When an investor pays cash into a business to become a part owner, the effect on the
accounting equation for the business will be to adjust which accounts? - CORRECT ANSWER-
Stockholder's equity, assets, and paid in equity
When a company borrows money from a bank to be repaid in over time, the effect on the
accounting equation for the company will be to adjust which accounts? - CORRECT ANSWER-
Cash and long-term liabilities
Revenue - CORRECT ANSWER-the value of the goods and services provided by a company in its
business operations
Expense - CORRECT ANSWER-the value of resources used in generating the reported revenue
Gains - CORRECT ANSWER-the amount of a company makes money on activities that are
peripheral to its primary operations
Losses - CORRECT ANSWER-the amount of a company loses money on activities that are
peripheral to its primary operations
QUESTIONS AND VERIFIED CORRECT
ANSWERS GRADED A+ [LATEST 2026-
2027] 100% GUARANTEED PASS
What is an external audit? Why would a company have an external audit completed? - CORRECT
ANSWER-An audit performed by accountants from outside a company increase the relevance
that users can place on information is the company's financial statements
Who is responsible for the information contained in the financial statements? - CORRECT
ANSWER-Who is responsible for the information contained in the financial statements?
1. The income statement describes a company's _____________________________? -
CORRECT ANSWER-Financial performance for a period of time
The balance sheet reports the company's ________________________________ ? - CORRECT
ANSWER-Financial position at a specific point in time
The statement of cash flows details how a company________________________ ? - CORRECT
ANSWER-Obtained and spent cash during a certain period of time
What information is included in the notes to the financial statements? - CORRECT ANSWER-A
summary of significant accounting policies, additional information doubt about the summary
tools found in the statements, disclosure of important information not recognized in the
statements, supplementing information required by FASB or SEC
,What are the criteria accountants use to determine when to recognize revenue? - CORRECT
ANSWER-Persuasive evidence of an arrangement must exist; delivery must have occurred or
services been rendered, the seller's price to the buyer must be fixed or determinable, and
collectability should be reasonably assured.
Assets - CORRECT ANSWER-probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events
Liabilities - CORRECT ANSWER-Probable future sacrifice of economic benefit arising from a
present obligation of a particular entity to transfer assets or provide services to other entities in
the future as a result of past transactions or events
Owners' Equity - CORRECT ANSWER-Difference between assets and liabilities in a corporation
Retained Earnings - CORRECT ANSWER-the cumulative amount of a corporation profits that
have been reinvested on behalf of the stockholders
Classified Balance Sheet - CORRECT ANSWER-a financial statement with classifications like
current assets and liabilities, long-term liabilities and other things
Current assets - CORRECT ANSWER-Cash, accounts receivable, and inventory
Current liabilities - CORRECT ANSWER-those obligations expected to be paid within one year,
the most common being accounts payable
Long term liabilities - CORRECT ANSWER-Liabilities that are around for awhile
What are the two components of owners' equity? - CORRECT ANSWER-Common Stock
Preferred Stock
, How are the assets and liabilities valued on the balance sheet? - CORRECT ANSWER-Assets are
on the top, and below them are the company's liabilities and shareholders' equity. It is also clear
that this balance sheet is in balance where the value of the assetsequals the combined value of
the liabilities and shareholders' equity.
When a company rents a warehouse by paying for the first six month's rent in advance, the
effect on the accounting equation on the day of payment would be to adjust which accounts? -
CORRECT ANSWER-Pre-paid rent will increase, cash will decrease
When an investor pays cash into a business to become a part owner, the effect on the
accounting equation for the business will be to adjust which accounts? - CORRECT ANSWER-
Stockholder's equity, assets, and paid in equity
When a company borrows money from a bank to be repaid in over time, the effect on the
accounting equation for the company will be to adjust which accounts? - CORRECT ANSWER-
Cash and long-term liabilities
Revenue - CORRECT ANSWER-the value of the goods and services provided by a company in its
business operations
Expense - CORRECT ANSWER-the value of resources used in generating the reported revenue
Gains - CORRECT ANSWER-the amount of a company makes money on activities that are
peripheral to its primary operations
Losses - CORRECT ANSWER-the amount of a company loses money on activities that are
peripheral to its primary operations
