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WGU D196 OA AND PRE ASSESSMENT EXAM
ACTUAL EXAM 2 VERSIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT ANSWERS)
/ALREADY GRADED A+
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the
borrowing company?
-Expenses decrease owners' equity.
-Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - . . ANSWER ✓✓ Expenses
decrease owners' equity.
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.
-Assets decrease by $5,000; liabilities increase by $5,000.
-Assets decrease by $5,000; revenues increase by $5,000.
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-Assets increase by $5,000; expenses increase by $5,000. - . .
ANSWER ✓✓ Assets decrease by $5,000; expenses increase by
$5,000.
A company reports these data:
Price per unit = $25
Variable costs per unit = $15
Fixed costs = $15,000
Given these data, what is the variable cost ratio?
60%
50%
40%
20% - . . ANSWER ✓✓ 60%
A company reports these data:
Total sales revenue = $250,000
Number of units sold = 50,000 units
Variable costs = $100,000
If the company is operating at its break-even point, what is the
company's total contribution margin?
$100,000
$50,000
$150,000
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$200,000 - . . ANSWER ✓✓ $150,000
A retail company purchased inventory costing $100,000. By the
end of the year, inventory costing $75,000 had been sold.
How is the remaining $25,000 in inventory reported in the
financial statements?
-As an asset in the balance sheet
-As manufacturing overhead in the income statement
-As a liability in the balance sheet
-As an administrative expense in the income statement - . .
ANSWER ✓✓ As an asset in the balance sheet
According to the accounting equation, the amount of liabilities
and equity must always be equal to another amount.
What is that other amount?
-Cash
-The sum of expenses and dividends
-Assets
-The sum of revenues and expenses - . . ANSWER ✓✓ Assets
For purposes of cash flow classification in the statement of cash
flows, which item is an operating activity?
-Buying equipment
-Paying employees
WGU D196 OA AND PRE ASSESSMENT EXAM
ACTUAL EXAM 2 VERSIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT ANSWERS)
/ALREADY GRADED A+
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the
borrowing company?
-Expenses decrease owners' equity.
-Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - . . ANSWER ✓✓ Expenses
decrease owners' equity.
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.
-Assets decrease by $5,000; liabilities increase by $5,000.
-Assets decrease by $5,000; revenues increase by $5,000.
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-Assets increase by $5,000; expenses increase by $5,000. - . .
ANSWER ✓✓ Assets decrease by $5,000; expenses increase by
$5,000.
A company reports these data:
Price per unit = $25
Variable costs per unit = $15
Fixed costs = $15,000
Given these data, what is the variable cost ratio?
60%
50%
40%
20% - . . ANSWER ✓✓ 60%
A company reports these data:
Total sales revenue = $250,000
Number of units sold = 50,000 units
Variable costs = $100,000
If the company is operating at its break-even point, what is the
company's total contribution margin?
$100,000
$50,000
$150,000
, 3|Page
$200,000 - . . ANSWER ✓✓ $150,000
A retail company purchased inventory costing $100,000. By the
end of the year, inventory costing $75,000 had been sold.
How is the remaining $25,000 in inventory reported in the
financial statements?
-As an asset in the balance sheet
-As manufacturing overhead in the income statement
-As a liability in the balance sheet
-As an administrative expense in the income statement - . .
ANSWER ✓✓ As an asset in the balance sheet
According to the accounting equation, the amount of liabilities
and equity must always be equal to another amount.
What is that other amount?
-Cash
-The sum of expenses and dividends
-Assets
-The sum of revenues and expenses - . . ANSWER ✓✓ Assets
For purposes of cash flow classification in the statement of cash
flows, which item is an operating activity?
-Buying equipment
-Paying employees
