1|Page
WGU - D774 Pre-assessment 2 EXAM fully solved &
updated 2026-2027(latest version verified for accuracy)
(Questions + Answers) Solved 100% Correct!!
Historical period of increased accounting importance ......ANSWER......The
Industrial Revolution
Effect of Sarbanes-Oxley Act of 2002 ......ANSWER......It increased corporate
responsibility.
Using corporate credit card for personal expenses ......ANSWER......Fraud
Purpose of financial accounting ......ANSWER......Provides historical financial
data in standardized reports for external stakeholders
Feature of managerial accounting reports ......ANSWER......Tailored to meet
internal decision-makers' needs
Statement describing managerial accounting reports ......ANSWER......Prepared
for internal decision-making needs of management
SEC role in accounting standards ......ANSWER......Enforces financial reporting
rules established by the FASB
Certification to offer auditing/tax services ......ANSWER......CPA
pg. 1
,2|Page
Auditor buying stock in a company they audit ......ANSWER......Violates
independence and objectivity
Who oversees and maintains internal controls ......ANSWER......Management
Manufacturing expense category on income statement ......ANSWER......Cost of
goods sold
Interpretation of net income ......ANSWER......Revenues are greater than
expenses
Limitation of accrual accounting ......ANSWER......May not reflect actual cash
flow
Effect of favorable volume variance ......ANSWER......Increases revenue and cost
of goods sold
Category for wages of store employees ......ANSWER......Cost of goods sold
Which statement tracks actual cash movement ......ANSWER......Statement of
cash flows
How to report flea market finds on balance sheet ......ANSWER......Assets
Trend shown by comparative income statements ......ANSWER......Changes in
profitability over time
pg. 2
, 3|Page
Why is net income lower than revenue ......ANSWER......Expenses reduce total
amount earned
Why positive net income but low cash ......ANSWER......Non-cash expenses &
accrual accounting impact cash flow
Why $100k revenue but $85k receipts ......ANSWER......Customers have not yet
paid
Limitation of the balance sheet ......ANSWER......Does not include future
performance
Stock issuance increases which equity category ......ANSWER......Paid-in capital
Why are raw materials assets ......ANSWER......They have future economic value
Balance sheet limitation shown by missing legal obligations
......ANSWER......May not account for contingent liabilities
Where record $350 owed to farmer ......ANSWER......Short-term liability
Building purchased is what type of asset ......ANSWER......Long-term tangible
asset
Yellow Leaf Bookstore owners' equity balance ......ANSWER......$36,000
pg. 3
WGU - D774 Pre-assessment 2 EXAM fully solved &
updated 2026-2027(latest version verified for accuracy)
(Questions + Answers) Solved 100% Correct!!
Historical period of increased accounting importance ......ANSWER......The
Industrial Revolution
Effect of Sarbanes-Oxley Act of 2002 ......ANSWER......It increased corporate
responsibility.
Using corporate credit card for personal expenses ......ANSWER......Fraud
Purpose of financial accounting ......ANSWER......Provides historical financial
data in standardized reports for external stakeholders
Feature of managerial accounting reports ......ANSWER......Tailored to meet
internal decision-makers' needs
Statement describing managerial accounting reports ......ANSWER......Prepared
for internal decision-making needs of management
SEC role in accounting standards ......ANSWER......Enforces financial reporting
rules established by the FASB
Certification to offer auditing/tax services ......ANSWER......CPA
pg. 1
,2|Page
Auditor buying stock in a company they audit ......ANSWER......Violates
independence and objectivity
Who oversees and maintains internal controls ......ANSWER......Management
Manufacturing expense category on income statement ......ANSWER......Cost of
goods sold
Interpretation of net income ......ANSWER......Revenues are greater than
expenses
Limitation of accrual accounting ......ANSWER......May not reflect actual cash
flow
Effect of favorable volume variance ......ANSWER......Increases revenue and cost
of goods sold
Category for wages of store employees ......ANSWER......Cost of goods sold
Which statement tracks actual cash movement ......ANSWER......Statement of
cash flows
How to report flea market finds on balance sheet ......ANSWER......Assets
Trend shown by comparative income statements ......ANSWER......Changes in
profitability over time
pg. 2
, 3|Page
Why is net income lower than revenue ......ANSWER......Expenses reduce total
amount earned
Why positive net income but low cash ......ANSWER......Non-cash expenses &
accrual accounting impact cash flow
Why $100k revenue but $85k receipts ......ANSWER......Customers have not yet
paid
Limitation of the balance sheet ......ANSWER......Does not include future
performance
Stock issuance increases which equity category ......ANSWER......Paid-in capital
Why are raw materials assets ......ANSWER......They have future economic value
Balance sheet limitation shown by missing legal obligations
......ANSWER......May not account for contingent liabilities
Where record $350 owed to farmer ......ANSWER......Short-term liability
Building purchased is what type of asset ......ANSWER......Long-term tangible
asset
Yellow Leaf Bookstore owners' equity balance ......ANSWER......$36,000
pg. 3
