WGU D074 Principles of Accounting Test | 55 Questions with 100% Correct Answers | Verified | Latest Update

WGU D074 Principles of Accounting Test | 55 Questions with 100% Correct Answers | Verified | Latest Update What is the effect of a company's accounting department maintaining high ethical standards? - Answer ️️ -The company's accounting information will increase in value. Why might employees be interested in their company's financial accounting information? - Answer ️️ -Financial statement data are often used in determining employee bonuses. What group establishes financial accounting rules in the United States? - Answer ️️ -Financial Accounting Standards Board (FASB). Which report is one of the three primary financial statements? Statement of cash flows, statement of management accounting, statement of the accounting cycle, or statement of stakeholder funds. - 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? - Answer ️️ -Assets decrease by $5,000; expenses increase by $5,000. What is a transaction? - Answer ️️ -Two parties exchange something of value. A company borrowed $80,000 cash from a bank. How does this transaction affect the accounting equation of the borrowing company? - Answer ️️ -Assets increase by $80,000; liabilities increase by $80,000. What is the impact of expenses on the accounting equation? - Answer ️️ -Expenses decrease owners' equity. Which type of account are accounts payable and notes payable both examples of? - Answer ️️ -Liability. What is the purpose of the financial accounting cycle? - Answer ️️ -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? - Answer ️️ -Assets. Which item is an expense item? Loans payable, accounts receivable, accounts payable, costs of goods sold. - Answer ️️ -Costs of goods sold. How is gross profit computed? - Answer ️️ -Sales minus cost of goods sold. Which type of account is retained earnings? - Answer ️️ -Equity. For purposes of cash flow classification in the statement of cash flows, which item is an operating activity? Buying equipment, paying employees, selling bonds, distributing dividends. - Answer ️️ -Paying employees. How does a classified balance sheet provide useful information to a decision maker? - Answer ️️ -It distinguishes between current and long-term assets. What information does a balance sheet provide to a decision maker? - Answer ️️ -Summary of the financial position of a company at a particular date. What is an account payable? - Answer ️️ -The amount owed by a company that purchased goods or services from a supplier on credit. What is an example of a financial cost that would result from poor direct labor budgeting and planning? - Answer ️️ -Increased hiring, training, and overtime costs. What does a manager have control over in a cost center? - Answer ️️ -Costs. What should be considered when developing a measure to evaluate the performance of a manager? - Answer ️️ -Only controllable costs. In some companies, the performance measures for profit center managers are heavily influenced by cost allocations downward from the organizational units (such as company headquarters). Why is this a mistake? - Answer ️️ -Uncontrollable costs should not be included in the performance evaluation measure if a profit center manager. Which budget should include the expected cost of supplies used by the office staff of the corporate headquarters? - Answer ️️ -Administrative expens