WGU D196 Pre Assessment
Questions and Answers
1. What is an example of direct materials?
Cost of robotic equipment in making automobiles
Cost of sandpaper in making wood furniture
Cost of saws and hammers in constructing a house
Cost of aluminum in making an airplane ANSWER : Cost of aluminum in making an
airplane
2. 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
compa-ny's accounting information will increase in value.
3. Why might employees be interested in their company's financial account-ing
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 : Fi-nancial statement data are often used in determining employee bonuses.
,4. 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 Ac-counting Standards Board (FASB)
5. 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
6. A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equa-tion?
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.
7. What is a transaction?
Two parties exchanging something of value
A type of commonly used accounting softwareA
category of merchandiser or retailer
An example of an online business document ANSWER : Two parties exchanging
some-thing of value
8. 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. 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
increaseby $80,000; liabilities increase by $80,000.
9. 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.
10. Which type of account are accounts payable and notes payable both
examples of?
Questions and Answers
1. What is an example of direct materials?
Cost of robotic equipment in making automobiles
Cost of sandpaper in making wood furniture
Cost of saws and hammers in constructing a house
Cost of aluminum in making an airplane ANSWER : Cost of aluminum in making an
airplane
2. 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
compa-ny's accounting information will increase in value.
3. Why might employees be interested in their company's financial account-ing
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 : Fi-nancial statement data are often used in determining employee bonuses.
,4. 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 Ac-counting Standards Board (FASB)
5. 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
6. A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equa-tion?
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.
7. What is a transaction?
Two parties exchanging something of value
A type of commonly used accounting softwareA
category of merchandiser or retailer
An example of an online business document ANSWER : Two parties exchanging
some-thing of value
8. 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. 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
increaseby $80,000; liabilities increase by $80,000.
9. 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.
10. Which type of account are accounts payable and notes payable both
examples of?
