WGU D196 EXAM QUESTIONS AND CORRECT VERIFIED
ANSWERS RATED A|GRADE
What is the effect of a company's accounting department maintaining high
ethical standards?
The company can hire fewer accountants to do the same amount of work.
The company can report more favorable results in its financial statements.
The company's accounting information will increase in value.
The company's accounting information will decrease in value. - ANSWER-
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 used to record long term liabilities.
Financial statement data are often used in determining employee
bonuses.
Financial statement data provide item-by-item product cost information.
Financial statement data provide detailed internal budget information. -
ANSWER-Financial statement data are often used in determining
employee bonuses.
Which group establishes financial accounting rules in the United States?
Internal Revenue Service (IRS)
Financial Accounting Standards Board (FASB)
International Accounting Standards Board (IASB)
American Institute of Certified Public Accountants (AICPA) - ANSWER-
Financial Accounting Standards Board (FASB)
,WGU D196 EXAM QUESTIONS AND CORRECT VERIFIED
ANSWERS RATED A|GRADE
Which report is one of the three primary financial statements?
Statement of management accounting
Statement of the accounting cycle
Statement of stakeholder funds
Statement of cash flows - ANSWER-Statement of cash flows
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; liabilities increase by $5,000.
Assets increase by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; revenues increase by $5,000. - ANSWER-
Assets decrease by $5,000; expenses increase by $5,000.
What is a transaction?
Two parties exchanging something of value
A type of commonly used accounting software
A category of merchandiser or retailer
An example of an online business document - ANSWER-Two parties
exchanging something of value
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing
company?
, WGU D196 EXAM QUESTIONS AND CORRECT VERIFIED
ANSWERS RATED A|GRADE
Assets increase by $80,000; liabilities increase by $80,000.
Assets increase by $80,000; owners' equity increases by $80,000.
Assets increase by $80,000; liabilities decrease by $80,000.
Assets increase by $80,000; revenues increase by $80,000. - ANSWER-
Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Expenses decrease liabilities.
Expenses increase liabilities.
Expenses decrease owners' equity.
Expenses increase owners' equity. - ANSWER-Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both
examples of?
Liability
Expense
Asset
Equity - ANSWER-Liability
What is the purpose of the financial accounting cycle?
To turn information about transactions into financial statements
ANSWERS RATED A|GRADE
What is the effect of a company's accounting department maintaining high
ethical standards?
The company can hire fewer accountants to do the same amount of work.
The company can report more favorable results in its financial statements.
The company's accounting information will increase in value.
The company's accounting information will decrease in value. - ANSWER-
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 used to record long term liabilities.
Financial statement data are often used in determining employee
bonuses.
Financial statement data provide item-by-item product cost information.
Financial statement data provide detailed internal budget information. -
ANSWER-Financial statement data are often used in determining
employee bonuses.
Which group establishes financial accounting rules in the United States?
Internal Revenue Service (IRS)
Financial Accounting Standards Board (FASB)
International Accounting Standards Board (IASB)
American Institute of Certified Public Accountants (AICPA) - ANSWER-
Financial Accounting Standards Board (FASB)
,WGU D196 EXAM QUESTIONS AND CORRECT VERIFIED
ANSWERS RATED A|GRADE
Which report is one of the three primary financial statements?
Statement of management accounting
Statement of the accounting cycle
Statement of stakeholder funds
Statement of cash flows - ANSWER-Statement of cash flows
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; liabilities increase by $5,000.
Assets increase by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; revenues increase by $5,000. - ANSWER-
Assets decrease by $5,000; expenses increase by $5,000.
What is a transaction?
Two parties exchanging something of value
A type of commonly used accounting software
A category of merchandiser or retailer
An example of an online business document - ANSWER-Two parties
exchanging something of value
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing
company?
, WGU D196 EXAM QUESTIONS AND CORRECT VERIFIED
ANSWERS RATED A|GRADE
Assets increase by $80,000; liabilities increase by $80,000.
Assets increase by $80,000; owners' equity increases by $80,000.
Assets increase by $80,000; liabilities decrease by $80,000.
Assets increase by $80,000; revenues increase by $80,000. - ANSWER-
Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Expenses decrease liabilities.
Expenses increase liabilities.
Expenses decrease owners' equity.
Expenses increase owners' equity. - ANSWER-Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both
examples of?
Liability
Expense
Asset
Equity - ANSWER-Liability
What is the purpose of the financial accounting cycle?
To turn information about transactions into financial statements
