WGU d196 preassment questions and answers 2023 with
complete solution
What is a transaction?
Two parties exchanging something of value
What is the effect of a company's accounting department maintaining high ethical
standards?
The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information?
Financial statement data are often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States?
financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements?
Assets decrease by $5,000; expenses increase by $5,000
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing company?
Assets increase by $80,000; liabilities increase by $80,000.
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
Assets decrease by $5,000; expenses increase by $5,000.
What is the impact of expenses on the accounting equation?
Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
Liability
What is the purpose of the financial accounting cycle?
To turn information about transactions into financial statements
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount?
Assets
Which item is an expense item?
Cost of goods sold
How is gross profit computed?
Sales minus cost of goods sold
Which type of account is retained earnings?
Equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity?
Paying employees
How does a classified balance sheet provide useful information to a decision maker?
It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker?
Summary of the financial position of a company at a particular date
What is an account payable?
complete solution
What is a transaction?
Two parties exchanging something of value
What is the effect of a company's accounting department maintaining high ethical
standards?
The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information?
Financial statement data are often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States?
financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements?
Assets decrease by $5,000; expenses increase by $5,000
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing company?
Assets increase by $80,000; liabilities increase by $80,000.
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
Assets decrease by $5,000; expenses increase by $5,000.
What is the impact of expenses on the accounting equation?
Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
Liability
What is the purpose of the financial accounting cycle?
To turn information about transactions into financial statements
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount?
Assets
Which item is an expense item?
Cost of goods sold
How is gross profit computed?
Sales minus cost of goods sold
Which type of account is retained earnings?
Equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity?
Paying employees
How does a classified balance sheet provide useful information to a decision maker?
It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker?
Summary of the financial position of a company at a particular date
What is an account payable?
