1|Page
WGU D196 TEST BANK FOR OA AND PREASSESSMENT
REVIEW 2026/2027 WITH 250 ACTUAL EXAM QUESTIONS
AND CORRECT ANSWERS (100% CORRECT ANSWERS)
D196 PRACTICE EXAM 2027 (BRAND NEW!!)
Accounting plays a vital role in the decision-making process. Which
action is the first step in the decision-making process?
......ANSWER......Identify the issue.
1/1
The money that a company needs to buy its land, pay its employees,
and buy its supplies is called capital. What are the potential sources of
capital for a business? ......ANSWER......Investors, creditors, and retained
business earnings
Investors, creditors, and retained business earnings are all common
sources of capital for a business.
Which primary area of accounting generates reports for internal users?
......ANSWER......Management accounting generates reports for internal
users, such as budgets and cost analyses.
Which group uses financial information to evaluate whether a company
will be able to repay a loan? ......ANSWER......Lenders
pg. 1
,2|Page
Which of the primary financial statements reports the resources,
obligations, and owner's equity of a company? ......ANSWER......The
balance sheet reports the resources of a company (the assets), the
company's obligations (the liabilities), and the owners' equity, which
represents the difference between what is owned (assets) and what is
owed (liabilities).
What is the role of the IASB in regulating accounting standards?
......ANSWER......Establish international accounting standards
The IASB establishes worldwide accounting standards. The IASB is a
private organization based in London. Currently, the IASB does not have
legal authority to set accounting standards for U.S. companies, although
the SEC does allow the use of IASB standards for non-U.S. companies
with shares traded on U.S. stock exchanges. The IASB is a standalone
organization (overseen by a Board of Trustees); it is not under the
jurisdiction of the SEC, the European Union, the United Nations, or any
other governmental body. The IASB members represent a broad
business constituency including auditors, corporate accountants,
analysts, and even accounting professors.
What group of people make up the FASB? ......ANSWER......People from
a variety of business-related backgrounds
What is the role of the GASB in setting accounting standards?
......ANSWER......The GASB is a private-sector organization that
establishes accounting and financial reporting standards for U.S. state
and local governments.
pg. 2
,3|Page
In what way do accountants have an economic incentive to conduct
themselves ethically? ......ANSWER......The value of the information
produced by accountants is related to the confidence that users have in
the reliability of that information.
How is it possible for an accountant to intentionally deceive financial
statement users and yet still technically be in compliance with generally
accepted accounting principles (GAAP)? ......ANSWER......There is
flexibility inherent in the assumptions underlying the preparation of
financial statements.
Your boss approaches you with a concerning letter from the IRS and
asks you to explain the role of the IRS in regulating accounting
standards. Based on the role of the IRS, what could be the problem
detailed in the letter? ......ANSWER......The company has not filed its
taxes in accordance with the law.
Anika is considering investing in a tech company that is known for
developing smart home appliances. Before investing, Anika first wants
to ensure that the company's past financial performance has been
satisfactory and that the company manages its cash flows well. What
type of accounting information would provide this evidence for Anika?
......ANSWER......Financial reports
Alliah Company just released its public accounting data for 20X9. Which
user of accounting information will monitor this data to ensure that the
pg. 3
, 4|Page
company is providing sufficient information for investors?
......ANSWER......Government agencies
A new product line manager approaches the accounting department in
order to understand the past performance of the product line he has
been asked to manage in the future. Which role of accounting involves
obtaining and using financial information to determine the financial
health and performance of a business or product line?
......ANSWER......Evaluation
You read in the newspaper that a local company you are familiar with
has been found guilty in court of publishing financial statements that
are false and misleading to users of those financial statements. In this
situation, what could the American Institute of Certified Public
Accountants (AICPA) do in response to the accountants who were found
guilty of unethical conduct in accounting practices?
......ANSWER......Implement professional sanctions
What is the correct summary sequence in the accounting cycle?
......ANSWER......Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a
check stub, are an important part of the accounting process. From an
accounting cycle standpoint, what is purpose of business documents?
......ANSWER......To confirm that a transaction has occurred
pg. 4
WGU D196 TEST BANK FOR OA AND PREASSESSMENT
REVIEW 2026/2027 WITH 250 ACTUAL EXAM QUESTIONS
AND CORRECT ANSWERS (100% CORRECT ANSWERS)
D196 PRACTICE EXAM 2027 (BRAND NEW!!)
Accounting plays a vital role in the decision-making process. Which
action is the first step in the decision-making process?
......ANSWER......Identify the issue.
1/1
The money that a company needs to buy its land, pay its employees,
and buy its supplies is called capital. What are the potential sources of
capital for a business? ......ANSWER......Investors, creditors, and retained
business earnings
Investors, creditors, and retained business earnings are all common
sources of capital for a business.
Which primary area of accounting generates reports for internal users?
......ANSWER......Management accounting generates reports for internal
users, such as budgets and cost analyses.
Which group uses financial information to evaluate whether a company
will be able to repay a loan? ......ANSWER......Lenders
pg. 1
,2|Page
Which of the primary financial statements reports the resources,
obligations, and owner's equity of a company? ......ANSWER......The
balance sheet reports the resources of a company (the assets), the
company's obligations (the liabilities), and the owners' equity, which
represents the difference between what is owned (assets) and what is
owed (liabilities).
What is the role of the IASB in regulating accounting standards?
......ANSWER......Establish international accounting standards
The IASB establishes worldwide accounting standards. The IASB is a
private organization based in London. Currently, the IASB does not have
legal authority to set accounting standards for U.S. companies, although
the SEC does allow the use of IASB standards for non-U.S. companies
with shares traded on U.S. stock exchanges. The IASB is a standalone
organization (overseen by a Board of Trustees); it is not under the
jurisdiction of the SEC, the European Union, the United Nations, or any
other governmental body. The IASB members represent a broad
business constituency including auditors, corporate accountants,
analysts, and even accounting professors.
What group of people make up the FASB? ......ANSWER......People from
a variety of business-related backgrounds
What is the role of the GASB in setting accounting standards?
......ANSWER......The GASB is a private-sector organization that
establishes accounting and financial reporting standards for U.S. state
and local governments.
pg. 2
,3|Page
In what way do accountants have an economic incentive to conduct
themselves ethically? ......ANSWER......The value of the information
produced by accountants is related to the confidence that users have in
the reliability of that information.
How is it possible for an accountant to intentionally deceive financial
statement users and yet still technically be in compliance with generally
accepted accounting principles (GAAP)? ......ANSWER......There is
flexibility inherent in the assumptions underlying the preparation of
financial statements.
Your boss approaches you with a concerning letter from the IRS and
asks you to explain the role of the IRS in regulating accounting
standards. Based on the role of the IRS, what could be the problem
detailed in the letter? ......ANSWER......The company has not filed its
taxes in accordance with the law.
Anika is considering investing in a tech company that is known for
developing smart home appliances. Before investing, Anika first wants
to ensure that the company's past financial performance has been
satisfactory and that the company manages its cash flows well. What
type of accounting information would provide this evidence for Anika?
......ANSWER......Financial reports
Alliah Company just released its public accounting data for 20X9. Which
user of accounting information will monitor this data to ensure that the
pg. 3
, 4|Page
company is providing sufficient information for investors?
......ANSWER......Government agencies
A new product line manager approaches the accounting department in
order to understand the past performance of the product line he has
been asked to manage in the future. Which role of accounting involves
obtaining and using financial information to determine the financial
health and performance of a business or product line?
......ANSWER......Evaluation
You read in the newspaper that a local company you are familiar with
has been found guilty in court of publishing financial statements that
are false and misleading to users of those financial statements. In this
situation, what could the American Institute of Certified Public
Accountants (AICPA) do in response to the accountants who were found
guilty of unethical conduct in accounting practices?
......ANSWER......Implement professional sanctions
What is the correct summary sequence in the accounting cycle?
......ANSWER......Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a
check stub, are an important part of the accounting process. From an
accounting cycle standpoint, what is purpose of business documents?
......ANSWER......To confirm that a transaction has occurred
pg. 4
