1
WGU
WGU D196 EXAM QUESTIONS AND
ANSWERS UPDATED (2024/2025)
(VERIFIED ANSWERS)
Which item is an expense item? - ANS ✓Cost of goods sold
How is gross profit computed? - ANS ✓Sales minus cost of goods sold
Which type of account is retained earnings? - ANS ✓Equity
For purposes of cash flow classification in the statement of cash flows,
which item is an operating activity? - ANS ✓Paying employees
How does a classified balance sheet provide useful information to a
decision maker? - ANS ✓It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker? - ANS
✓Summary of the financial position of a company at a particular date
What is an account payable? - ANS ✓The amount owed by a company that
purchased goods or services from a supplier on credit
Based on your analysis, what should management be concerned about? -
ANS ✓The increase in operating expenses over the past two years
WGU D196
, 2
WGU
Which action would make the profitability of the company in 20X9 the
same as in 20X7? - ANS ✓Increasing the proportion of gross profit to sales by
about 2%
Why is the net cash for December negative while total sales for December
are the highest out of the months from October through December? - ANS
✓Total cash available does not reflect December sales because there was a high
volume of credit sales.
How can Whole Pine avoid having negative net cash flows in December? -
ANS ✓Postpone purchasing the new equipment and do not pay cash dividends to
shareholders.
What is an example of a financial cost that would result from poor direct
labor budgeting and planning? - ANS ✓Increased hiring, training, and overtime
costs
What does a manager have control over in a cost center? - ANS ✓Costs
What should be considered when developing a measure to evaluate the
performance of a manager? - ANS ✓Only controllable costs
In some companies, the performance measures for profit center managers
are heavily influenced by cost allocations downward from organizational
units (such as company headquarters).
Why is this a mistake? - ANS ✓Uncontrollable costs should not be included in
the performance evaluation measure of a profit center manager.
Which budget should include the expected cost of supplies used by the
office staff of the corporate headquarters? - ANS ✓Administrative expense
budget
Which items are uncontrollable, external variables that make it difficult to
forecast the level of sales? - ANS ✓Customer tastes and economic conditions
WGU D196
WGU
WGU D196 EXAM QUESTIONS AND
ANSWERS UPDATED (2024/2025)
(VERIFIED ANSWERS)
Which item is an expense item? - ANS ✓Cost of goods sold
How is gross profit computed? - ANS ✓Sales minus cost of goods sold
Which type of account is retained earnings? - ANS ✓Equity
For purposes of cash flow classification in the statement of cash flows,
which item is an operating activity? - ANS ✓Paying employees
How does a classified balance sheet provide useful information to a
decision maker? - ANS ✓It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker? - ANS
✓Summary of the financial position of a company at a particular date
What is an account payable? - ANS ✓The amount owed by a company that
purchased goods or services from a supplier on credit
Based on your analysis, what should management be concerned about? -
ANS ✓The increase in operating expenses over the past two years
WGU D196
, 2
WGU
Which action would make the profitability of the company in 20X9 the
same as in 20X7? - ANS ✓Increasing the proportion of gross profit to sales by
about 2%
Why is the net cash for December negative while total sales for December
are the highest out of the months from October through December? - ANS
✓Total cash available does not reflect December sales because there was a high
volume of credit sales.
How can Whole Pine avoid having negative net cash flows in December? -
ANS ✓Postpone purchasing the new equipment and do not pay cash dividends to
shareholders.
What is an example of a financial cost that would result from poor direct
labor budgeting and planning? - ANS ✓Increased hiring, training, and overtime
costs
What does a manager have control over in a cost center? - ANS ✓Costs
What should be considered when developing a measure to evaluate the
performance of a manager? - ANS ✓Only controllable costs
In some companies, the performance measures for profit center managers
are heavily influenced by cost allocations downward from organizational
units (such as company headquarters).
Why is this a mistake? - ANS ✓Uncontrollable costs should not be included in
the performance evaluation measure of a profit center manager.
Which budget should include the expected cost of supplies used by the
office staff of the corporate headquarters? - ANS ✓Administrative expense
budget
Which items are uncontrollable, external variables that make it difficult to
forecast the level of sales? - ANS ✓Customer tastes and economic conditions
WGU D196
