WGU D196 STUDY SET| Ques ons and answers
|updated RATED A+ | 2026
Accoun ng plays a vital role in the decision-making process. Which ac on is the first step in the
decision-making process.
Iden fy the issues
The money that a company needs to buy its land, pay its employees, and buy its supplies is
called capital. What are the poten al sources of capital for a business.
Investors, creditors, and retained business earnings.
Accountants measure and communicate the results of business ac vi es.
True
Which primary area of accoun ng generates reports for internal users.
Management accoun ng
Which group use financial informa on to evaluate whether a company will be able to repay a
loan.
Lenders
Which of the primary financial statements reports the resources, obliga ons, and owner's
equity of a company
Balance sheet
What is the role of the IASB regula ng accoun ng standards
Establish interna onal accoun ng standards
What group of people make up the FASB
People from a variety of business-related backgrounds
What is the role of the GASB in se+ng accoun ng standards
The GSAB is a private-sector organiza on the establishes accoun ng and financial repor ng
standards for the U.S. state and local governments
In what way do accountants have an economic incen ve to conduct themselves ethically
,The value of the informa on produced by accountants is related to the confidence that users
have in the reliability of that informa on
How is it possible for an accountant to inten onally deceive financial statement users and s ll
technically be in compliance with generally accepted accoun ng principles (GAAP)
There is flexibility inherent in the assump ons underlying the prepara on of financial
statements
Your boss has approached you with a concerning le4er from the IRS and ask you to explain the
role of the IRS in regula ng accoun ng standards. Based on the role of the IRS, what would be
the problem detailed in the le4er
The company has not filed its taxes in accordance to the law
Anika is considering inves ng in a tech company that is known for developing smart home
appliances. Before inves ng, Annika first wants to ensure that the companies past performance
has been sa sfactory and that the company manages its cash flows well. What type of
accoun ng informa on would provide this evidence for Anika
Financial reports
Alliah company just released it's public accoun ng data for 2019. Which user of accoun ng
informa on will monitor this data to ensure that the company is providing sufficient informa on
for investors.
Government agencies
A new product line manager approaches the accoun ng department in order to understand the
past performance of the product line he has been asked to manage in the future. Which role of
accoun ng involves obtaining and using financial informa on to determine the financial health
and performance of a business or product line?
Evalua on
You read in the newspaper that a local company you are familiar with has been found guilty in
court of publishing financial statements that are false and misleading to users of those financial
statements. In this situa on, what could the American Ins tute of Cer fied Public Accountants
(AICPA) do in response to the accountants who were found guilty of unethical conduct in
accoun ng prac ces?
Implement professional sanc ons
What is the correct summary sequence in the accoun ng cycle?
, Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an important
part of the accoun ng process. From an accoun ng cycle standpoint, what is purpose of
business documents?
To confirm that a transac on has occurred
What is the purpose of the financial accoun ng cycle?
To turn transac ons into financial statements and provide useful financial informa on for
decision makers
What is a transac on in accoun ng?
An interac on in which two par es exchange something of value
In the context of the financial accoun ng cycle, what is the defini on of an account?
A specific accoun ng record that provides an efficient way to categorize similar types of
transac ons
What is an arm's-length transac on?
An exchange between two independent par es
Which event represents a transac on recorded as part of the financial accoun ng cycle?
The sale of a product for cash or on account
A company sells a product to a customer on account. Which part(s) of the accoun ng equa on
does this par cular transac on change?
Both assets and owners' equity
What is an example of an internal transac on?
An employee is transferred from one department to another
Which item is a liability?
mortgage
A>er Oliver records each transac on, how should he ensure that the accoun ng equa on
remains in balance?
Add up the balances in all of the asset accounts and compare them to the sum of all the liability
and owners' equity accounts
|updated RATED A+ | 2026
Accoun ng plays a vital role in the decision-making process. Which ac on is the first step in the
decision-making process.
Iden fy the issues
The money that a company needs to buy its land, pay its employees, and buy its supplies is
called capital. What are the poten al sources of capital for a business.
Investors, creditors, and retained business earnings.
Accountants measure and communicate the results of business ac vi es.
True
Which primary area of accoun ng generates reports for internal users.
Management accoun ng
Which group use financial informa on to evaluate whether a company will be able to repay a
loan.
Lenders
Which of the primary financial statements reports the resources, obliga ons, and owner's
equity of a company
Balance sheet
What is the role of the IASB regula ng accoun ng standards
Establish interna onal accoun ng standards
What group of people make up the FASB
People from a variety of business-related backgrounds
What is the role of the GASB in se+ng accoun ng standards
The GSAB is a private-sector organiza on the establishes accoun ng and financial repor ng
standards for the U.S. state and local governments
In what way do accountants have an economic incen ve to conduct themselves ethically
,The value of the informa on produced by accountants is related to the confidence that users
have in the reliability of that informa on
How is it possible for an accountant to inten onally deceive financial statement users and s ll
technically be in compliance with generally accepted accoun ng principles (GAAP)
There is flexibility inherent in the assump ons underlying the prepara on of financial
statements
Your boss has approached you with a concerning le4er from the IRS and ask you to explain the
role of the IRS in regula ng accoun ng standards. Based on the role of the IRS, what would be
the problem detailed in the le4er
The company has not filed its taxes in accordance to the law
Anika is considering inves ng in a tech company that is known for developing smart home
appliances. Before inves ng, Annika first wants to ensure that the companies past performance
has been sa sfactory and that the company manages its cash flows well. What type of
accoun ng informa on would provide this evidence for Anika
Financial reports
Alliah company just released it's public accoun ng data for 2019. Which user of accoun ng
informa on will monitor this data to ensure that the company is providing sufficient informa on
for investors.
Government agencies
A new product line manager approaches the accoun ng department in order to understand the
past performance of the product line he has been asked to manage in the future. Which role of
accoun ng involves obtaining and using financial informa on to determine the financial health
and performance of a business or product line?
Evalua on
You read in the newspaper that a local company you are familiar with has been found guilty in
court of publishing financial statements that are false and misleading to users of those financial
statements. In this situa on, what could the American Ins tute of Cer fied Public Accountants
(AICPA) do in response to the accountants who were found guilty of unethical conduct in
accoun ng prac ces?
Implement professional sanc ons
What is the correct summary sequence in the accoun ng cycle?
, Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an important
part of the accoun ng process. From an accoun ng cycle standpoint, what is purpose of
business documents?
To confirm that a transac on has occurred
What is the purpose of the financial accoun ng cycle?
To turn transac ons into financial statements and provide useful financial informa on for
decision makers
What is a transac on in accoun ng?
An interac on in which two par es exchange something of value
In the context of the financial accoun ng cycle, what is the defini on of an account?
A specific accoun ng record that provides an efficient way to categorize similar types of
transac ons
What is an arm's-length transac on?
An exchange between two independent par es
Which event represents a transac on recorded as part of the financial accoun ng cycle?
The sale of a product for cash or on account
A company sells a product to a customer on account. Which part(s) of the accoun ng equa on
does this par cular transac on change?
Both assets and owners' equity
What is an example of an internal transac on?
An employee is transferred from one department to another
Which item is a liability?
mortgage
A>er Oliver records each transac on, how should he ensure that the accoun ng equa on
remains in balance?
Add up the balances in all of the asset accounts and compare them to the sum of all the liability
and owners' equity accounts
