WGU D774 Intro to Business Accounting
Questions and Answers | 2026 Updated
Practice Questions | Grade A+
• An accounting method that records revenues and expenses when they are earned or
incurred, not when cash changes hands. -✓✓Accrual Accounting
• The formula Assets = Liabilities + Equity, which underpins the balance sheet. -
✓✓Accounting Equation
• Resources owned by a business that have value and can generate future benefit. -
✓✓Assets
• Independent verification that financial information or internal controls are reliable and
comply with relevant standards. -✓✓Assurance
• A professional who examines financial records and controls to assess accuracy and
compliance. -✓✓Auditor
• A snapshot of a company's financial position at a given time, showing assets,
liabilities, and equity. -✓✓Balance Sheet
• The level of sales at which total revenue equals total costs, resulting in neither profit
nor loss. -✓✓Break-Even Point
• The gradual increase in a budget over time due to repeated small increases that go
unchallenged. -✓✓Budget Creep
• The difference between what was budgeted and what actually occurred in financial
performance. -✓✓Budget Variance
• The process of planning and managing income and expenses over a specific period to
meet financial goals. -✓✓Budgeting
• Educational activities that professionals engage in to maintain, improve, and expand
their skills and knowledge within their field. -✓✓Continuing Professional Education
• The amount remaining from sales revenue after variable costs are deducted; used to
cover fixed costs and contribute to profit. -✓✓Contribution Margin
• The sum of direct labor and manufacturing overhead; costs involved in converting
materials to finished goods. -✓✓Conversion Costs
, • A department or function that incurs costs but does not directly generate revenue. -
✓✓Cost Center
• The ability to achieve desired outcomes with minimal expense, often a goal of zero-
based budgeting. -✓✓Cost Efficiency
• Anything for which costs are measured separately, such as a product, department, or
customer order. -✓✓Cost Object
• A lack or weakness in meeting a required standard, guideline, or expectation. -
✓✓Deficiency
• Tracking and evaluating financial performance by department or business unit. -
✓✓Departmental Reporting
• Raw materials directly used in the production of goods. -✓✓Direct Materials
• Wages paid to employees directly involved in production. -✓✓Direct Labour
• A difference or inconsistency between two or more items that should be in agreement.
-✓✓Discrepancy
• The concept that a business is a separate economic unit, distinct from its owners, with
its own financial records and activities. -✓✓Entity Perspective
• Highlighting significant differences between budgeted and actual figures to support
financial decision-making. -✓✓Exception Reporting
• The costs incurred in operating a business, such as wages, rent, and materials. -
✓✓Expenses
• An independent reviewer of financial statements and internal controls for accuracy and
transparency. -✓✓External Auditor
• When actual income is higher, or expenses are lower than the budgeted amount. -
✓✓Favorable Variance
• Intentional deception or dishonest conduct aimed at gaining an unfair advantage or
causing harm to others. -✓✓Fraud
• Produces standardized reports for external stakeholders like investors and regulators.
-✓✓Financial Accounting
Questions and Answers | 2026 Updated
Practice Questions | Grade A+
• An accounting method that records revenues and expenses when they are earned or
incurred, not when cash changes hands. -✓✓Accrual Accounting
• The formula Assets = Liabilities + Equity, which underpins the balance sheet. -
✓✓Accounting Equation
• Resources owned by a business that have value and can generate future benefit. -
✓✓Assets
• Independent verification that financial information or internal controls are reliable and
comply with relevant standards. -✓✓Assurance
• A professional who examines financial records and controls to assess accuracy and
compliance. -✓✓Auditor
• A snapshot of a company's financial position at a given time, showing assets,
liabilities, and equity. -✓✓Balance Sheet
• The level of sales at which total revenue equals total costs, resulting in neither profit
nor loss. -✓✓Break-Even Point
• The gradual increase in a budget over time due to repeated small increases that go
unchallenged. -✓✓Budget Creep
• The difference between what was budgeted and what actually occurred in financial
performance. -✓✓Budget Variance
• The process of planning and managing income and expenses over a specific period to
meet financial goals. -✓✓Budgeting
• Educational activities that professionals engage in to maintain, improve, and expand
their skills and knowledge within their field. -✓✓Continuing Professional Education
• The amount remaining from sales revenue after variable costs are deducted; used to
cover fixed costs and contribute to profit. -✓✓Contribution Margin
• The sum of direct labor and manufacturing overhead; costs involved in converting
materials to finished goods. -✓✓Conversion Costs
, • A department or function that incurs costs but does not directly generate revenue. -
✓✓Cost Center
• The ability to achieve desired outcomes with minimal expense, often a goal of zero-
based budgeting. -✓✓Cost Efficiency
• Anything for which costs are measured separately, such as a product, department, or
customer order. -✓✓Cost Object
• A lack or weakness in meeting a required standard, guideline, or expectation. -
✓✓Deficiency
• Tracking and evaluating financial performance by department or business unit. -
✓✓Departmental Reporting
• Raw materials directly used in the production of goods. -✓✓Direct Materials
• Wages paid to employees directly involved in production. -✓✓Direct Labour
• A difference or inconsistency between two or more items that should be in agreement.
-✓✓Discrepancy
• The concept that a business is a separate economic unit, distinct from its owners, with
its own financial records and activities. -✓✓Entity Perspective
• Highlighting significant differences between budgeted and actual figures to support
financial decision-making. -✓✓Exception Reporting
• The costs incurred in operating a business, such as wages, rent, and materials. -
✓✓Expenses
• An independent reviewer of financial statements and internal controls for accuracy and
transparency. -✓✓External Auditor
• When actual income is higher, or expenses are lower than the budgeted amount. -
✓✓Favorable Variance
• Intentional deception or dishonest conduct aimed at gaining an unfair advantage or
causing harm to others. -✓✓Fraud
• Produces standardized reports for external stakeholders like investors and regulators.
-✓✓Financial Accounting
