WGU D102 Real Exam Questions and
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Which is the proper description of the accounting equation? -✓✓Assets = Liabilities +
Owners Equity
After the effects of every transaction are considered and recorded, what must the
accounting equation do?
A. Equal itself, or balance
B. Equal total assets
C. Equal total owners' equity
D. Equal total liabilities -✓✓A. Equal itself, or balance
Which statement best describes the main features of inventories?
A. Goods used by company employees on a daily basis
B. Goods purchased and held for sale
C. Goods due from customers who have purchased on account
D. Goods used by a company on a long-term basis, usually more than five years -✓✓B.
Goods purchased and held for sale
What is a classified balance sheet?
A. A balance sheet that separates liabilities from equities
B. A balance sheet that is for a period of time rather than as of a point in time
C. A balance sheet that is not publicly disclosed
D. A balance sheet that distinguishes between current and long-term assets -✓✓D. A
balance sheet that distinguishes between current and long-term assets
What does owners' equity represent?
A. The difference between total assets and total liabilities
B. The difference between total liabilities and total owners' equity
C. The difference between current assets and long-term assets
D. The difference between current liabilities and long-term liabilities -✓✓A. The
difference between total assets and total liabilities
For most companies, when assets or liabilities are classified as "current" on the balance
sheet, it generally means the related assets or liabilities will be turned into cash or will
be required to be paid, respectively, within what time frame?
A. The next year
B. The next six months
C. The next quarter
D. The next month -✓✓A. The next year
,What is owners' equity?
A. An obligation to pay cash, transfer other assets, or provide services to someone else
B. A residual amount representing the net assets available after all obligations have
been satisfied
C. An economic resource that is owned or controlled by a company
D. The sum of operating, investing, and financing cash flows -✓✓B. A residual amount
representing the net assets available after all obligations have been satisfied
Which item is an asset?
A. Accounts payable
B. Capital stock
C. Retained earnings
D. Accounts receivable -✓✓D. Accounts receivable
According to the accounting equation, what is the correct computation of owners'
equity?
A. Total Assets - Liabilities
B. Cash - Bank Loan Balance
C. Total Assets + Liabilities
D. Cash + Bank Loan Balance -✓✓A. Total Assets - Liabilities
What is an accurate description of accounts payable?
A. Obligation arising from the sale of office supplies on account
B. Obligation arising from the payment of income taxes on account
C. Obligation arising from the purchase of inventory on account
D. Obligation arising from the sale of equipment on account -✓✓C. Obligation arising
from the purchase of inventory on account
Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
Inventory
Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets? -✓✓Cash,
accounts receivable, and inventory
What is depreciation expense?
A. The amount of gross profit divided by sales for the year
B. The amount of inventory lost, stolen, or sold during the year
,C. The amount of uncollectible accounts created by credit sales during the year
D. The amount of wear and tear on long-lived assets during the year -✓✓D. The amount
of wear and tear on long-lived assets during the year
Which item is a revenue item?
A. Cash
B. Accounts Receivable
C. Sales
D. Loan Payable -✓✓C. Sales
What is an example of an expense that fits under the heading "selling, general, and
administrative expense"?
A. Wages of company headquarters accounting staff
B. Cost paid for the use of someone else's money
C. Fees earned by providing services
D. Purchase cost of inventory items bought from suppliers -✓✓A. Wages of company
headquarters accounting staff
What is an income statement?
A. Report of the operating, investing, and financing cash flows of a company during a
period
B. Report of the revenues and expenses of a company during a period
C. Report of the total of the balances of all of the company's bank accounts
D. Report of the assets, liabilities, and equity of a company as of a point in time -✓✓B.
Report of the revenues and expenses of a company during a period
Which are components of an income statement?
A. Retained earnings and dividends
B. Current and noncurrent assets
C. Short-term and accrued liabilities
D. Revenue and expenses -✓✓D. Revenue and expenses
What is net income?
A. The amount of cash on hand at the end of the year
B. The total amount of assets reported in the balance sheet
C. The amount by which revenues exceed expenses
D. The amount of assets consumed through business operations -✓✓C. The amount by
which revenues exceed expenses
How is earnings per share (EPS) computed?
A. Total equity divided by sales revenue
B. Total expenses divided by sales revenue
C. Net income divided by total sales revenue
D. Net income divided by the number of shares -✓✓D. Net income divided by the
number of shares
, What is bad debt expense?
A. Amount of uncollectible accounts created by credit sales during the year
B. Amount of gross profit divided by sales for the year
C. Amount of inventory lost, stolen, or sold during the year
D. Amount of wear and tear on long-lived assets during the year -✓✓A. Amount of
uncollectible accounts created by credit sales during the year
Which item is an expense item?
A. Accounts Payable
B. Sales
C. Cash
D. Cost of Goods Sold -✓✓D. Cost of Goods Sold
What is a single-step income statement?
A. Groups and total revenues; groups and total expenses
B. Emphasizes separate computation of gross profit and operating income
C. Includes all other expenses, but omits income tax expense
D. Omits both interest expense and income tax expense -✓✓A. Groups and total
revenues; groups and total expenses
What is "gross profit"?
A. Total Revenues − Total Expenses
B. Sales − Cost of Goods Sold.
C. Accounts Receivable − Accounts Payable
D. Total Assets − Total Liabilities -✓✓B. Sales − Cost of Goods Sold.
What is a company's gross profit percentage?
A. Net Income ÷ Sales
B. Gross Profit ÷ Sales
C. Gross Profit ÷ Net Income
D. Net Income ÷ Owners' Equity -✓✓B. Gross Profit ÷ Sales
What is a statement of cash flows?
A. Report of the total of the balances of all of a company's bank accounts.
B. Report of the assets, liabilities, and equity of a company as of a point in time.
C. Report of the operating, investing, and financing cash flows of a company during a
period.
D. Report of the revenues and expenses of a company during a period. -✓✓C. Report of
the operating, investing, and financing cash flows of a company during a period.
What are financing activities?
A. Those activities associated with buying and selling long-term assets—primarily the
purchase and sale of land, buildings, and equipment.
B. Those activities that are part of the day-to-day business of a company.
Solutions | Updated Question Bank |
A+ Verified
Which is the proper description of the accounting equation? -✓✓Assets = Liabilities +
Owners Equity
After the effects of every transaction are considered and recorded, what must the
accounting equation do?
A. Equal itself, or balance
B. Equal total assets
C. Equal total owners' equity
D. Equal total liabilities -✓✓A. Equal itself, or balance
Which statement best describes the main features of inventories?
A. Goods used by company employees on a daily basis
B. Goods purchased and held for sale
C. Goods due from customers who have purchased on account
D. Goods used by a company on a long-term basis, usually more than five years -✓✓B.
Goods purchased and held for sale
What is a classified balance sheet?
A. A balance sheet that separates liabilities from equities
B. A balance sheet that is for a period of time rather than as of a point in time
C. A balance sheet that is not publicly disclosed
D. A balance sheet that distinguishes between current and long-term assets -✓✓D. A
balance sheet that distinguishes between current and long-term assets
What does owners' equity represent?
A. The difference between total assets and total liabilities
B. The difference between total liabilities and total owners' equity
C. The difference between current assets and long-term assets
D. The difference between current liabilities and long-term liabilities -✓✓A. The
difference between total assets and total liabilities
For most companies, when assets or liabilities are classified as "current" on the balance
sheet, it generally means the related assets or liabilities will be turned into cash or will
be required to be paid, respectively, within what time frame?
A. The next year
B. The next six months
C. The next quarter
D. The next month -✓✓A. The next year
,What is owners' equity?
A. An obligation to pay cash, transfer other assets, or provide services to someone else
B. A residual amount representing the net assets available after all obligations have
been satisfied
C. An economic resource that is owned or controlled by a company
D. The sum of operating, investing, and financing cash flows -✓✓B. A residual amount
representing the net assets available after all obligations have been satisfied
Which item is an asset?
A. Accounts payable
B. Capital stock
C. Retained earnings
D. Accounts receivable -✓✓D. Accounts receivable
According to the accounting equation, what is the correct computation of owners'
equity?
A. Total Assets - Liabilities
B. Cash - Bank Loan Balance
C. Total Assets + Liabilities
D. Cash + Bank Loan Balance -✓✓A. Total Assets - Liabilities
What is an accurate description of accounts payable?
A. Obligation arising from the sale of office supplies on account
B. Obligation arising from the payment of income taxes on account
C. Obligation arising from the purchase of inventory on account
D. Obligation arising from the sale of equipment on account -✓✓C. Obligation arising
from the purchase of inventory on account
Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
Inventory
Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets? -✓✓Cash,
accounts receivable, and inventory
What is depreciation expense?
A. The amount of gross profit divided by sales for the year
B. The amount of inventory lost, stolen, or sold during the year
,C. The amount of uncollectible accounts created by credit sales during the year
D. The amount of wear and tear on long-lived assets during the year -✓✓D. The amount
of wear and tear on long-lived assets during the year
Which item is a revenue item?
A. Cash
B. Accounts Receivable
C. Sales
D. Loan Payable -✓✓C. Sales
What is an example of an expense that fits under the heading "selling, general, and
administrative expense"?
A. Wages of company headquarters accounting staff
B. Cost paid for the use of someone else's money
C. Fees earned by providing services
D. Purchase cost of inventory items bought from suppliers -✓✓A. Wages of company
headquarters accounting staff
What is an income statement?
A. Report of the operating, investing, and financing cash flows of a company during a
period
B. Report of the revenues and expenses of a company during a period
C. Report of the total of the balances of all of the company's bank accounts
D. Report of the assets, liabilities, and equity of a company as of a point in time -✓✓B.
Report of the revenues and expenses of a company during a period
Which are components of an income statement?
A. Retained earnings and dividends
B. Current and noncurrent assets
C. Short-term and accrued liabilities
D. Revenue and expenses -✓✓D. Revenue and expenses
What is net income?
A. The amount of cash on hand at the end of the year
B. The total amount of assets reported in the balance sheet
C. The amount by which revenues exceed expenses
D. The amount of assets consumed through business operations -✓✓C. The amount by
which revenues exceed expenses
How is earnings per share (EPS) computed?
A. Total equity divided by sales revenue
B. Total expenses divided by sales revenue
C. Net income divided by total sales revenue
D. Net income divided by the number of shares -✓✓D. Net income divided by the
number of shares
, What is bad debt expense?
A. Amount of uncollectible accounts created by credit sales during the year
B. Amount of gross profit divided by sales for the year
C. Amount of inventory lost, stolen, or sold during the year
D. Amount of wear and tear on long-lived assets during the year -✓✓A. Amount of
uncollectible accounts created by credit sales during the year
Which item is an expense item?
A. Accounts Payable
B. Sales
C. Cash
D. Cost of Goods Sold -✓✓D. Cost of Goods Sold
What is a single-step income statement?
A. Groups and total revenues; groups and total expenses
B. Emphasizes separate computation of gross profit and operating income
C. Includes all other expenses, but omits income tax expense
D. Omits both interest expense and income tax expense -✓✓A. Groups and total
revenues; groups and total expenses
What is "gross profit"?
A. Total Revenues − Total Expenses
B. Sales − Cost of Goods Sold.
C. Accounts Receivable − Accounts Payable
D. Total Assets − Total Liabilities -✓✓B. Sales − Cost of Goods Sold.
What is a company's gross profit percentage?
A. Net Income ÷ Sales
B. Gross Profit ÷ Sales
C. Gross Profit ÷ Net Income
D. Net Income ÷ Owners' Equity -✓✓B. Gross Profit ÷ Sales
What is a statement of cash flows?
A. Report of the total of the balances of all of a company's bank accounts.
B. Report of the assets, liabilities, and equity of a company as of a point in time.
C. Report of the operating, investing, and financing cash flows of a company during a
period.
D. Report of the revenues and expenses of a company during a period. -✓✓C. Report of
the operating, investing, and financing cash flows of a company during a period.
What are financing activities?
A. Those activities associated with buying and selling long-term assets—primarily the
purchase and sale of land, buildings, and equipment.
B. Those activities that are part of the day-to-day business of a company.
