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WGU D196 Questions And Verified Answers
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WGU D196 Questions And Verified AnswersAccounting plays a vital role in the decision-making process. Which action is
the first step in the decision-making process? ✔️Ans - Identify the issue.
The money that a company needs to buy its land, pay its employees, and buy
its supplies is called capital. What are the potential sources of capital for a
business? ✔️Ans - Investors, creditors, and retained business earnings
True or False: Accountants measure and communicate the results of business
activities ✔️Ans - True
What is the correct summary sequence in the accounting cycle? ✔️Ans -
Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub,
are an important part of the accounting process. From an accounting cycle
standpoint, what is purpose of business documents? ✔️Ans - To confirm
that a transaction has occurred
What is the purpose of the financial accounting cycle? ✔️Ans - To turn
transactions into financial statements and provide useful financial
information for decision makers
A new product line manager approaches the accounting department in order
to understand the past performance of the product line he has been asked to
manage in the future. Which role of accounting involves obtaining and using
financial information to determine the financial health and performance of a
business or product line? ✔️Ans - Evaluation
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 situation, what could
the American Institute of Certified Public Accountants (AICPA) do in response
to the accountants who were found guilty of unethical conduct in accounting
practices? ✔️Ans - Implement professional sanctions
,Alliah Company just released its public accounting data for 20X9. Which user
of accounting information will monitor this data to ensure that the company is
providing sufficient information for investors? ✔️Ans - Government
agencies, SEC
Anika is considering investing in a tech company that is known for developing
smart home appliances. Before investing, Anika first wants to ensure that the
company's past financial performance has been satisfactory and that the
company manages its cash flows well. What type of accounting information
would provide this evidence for Anika? ✔️Ans - Financial reports
Your boss approaches you with a concerning letter from the IRS and asks you
to explain the role of the IRS in regulating accounting standards. Based on the
role of the IRS, what could be the problem detailed in the letter? ✔️Ans -
The company has not filed its taxes in accordance with the law.
In what way do accountants have an economic incentive to conduct
themselves ethically? ✔️Ans - The value of the information produced by
accountants is related to the confidence that users have in the reliability of
that information.
How is it possible for an accountant to intentionally deceive financial
statement users and yet still technically be in compliance with generally
accepted accounting principles (GAAP)? ✔️Ans - There is flexibility
inherent in the assumptions underlying the preparation of financial
statements.
What is the role of the IASB in regulating accounting standards? ✔️Ans -
Establish international accounting standards
What group of people make up the FASB? ✔️Ans - People from a variety
of business-related backgrounds
What is the role of the GASB in setting accounting standards? ✔️Ans -
The GASB is a private-sector organization that establishes accounting and
financial reporting standards for U.S. state and local governments.
Which primary area of accounting generates reports for internal users?
✔️Ans - Management accounting
, Which group uses financial information to evaluate whether a company will
be able to repay a loan? ✔️Ans - Lenders
Which of the primary financial statements reports the resources, obligations,
and owner's equity of a company? ✔️Ans - Balance sheet
What is the first step of the financial accounting cycle that Oliver will perform?
✔️Ans - Analyze transactions
Which item is a liability? ✔️Ans - Mortgage
Which of the items listed should Oliver record as an external transaction?
✔️Ans - Purchases of inventory from suppliers
After Oliver records each transaction, how should he ensure that the
accounting equation remains in balance? ✔️Ans - Add up the balances in
all of the asset accounts and compare them to the sum of all the liability and
owners' equity accounts
After determining the company's financial position, Oliver recommends that
the company borrow money from the bank for the next accounting period.
What is the effect of borrowing money from the bank for the next accounting
period on the company's books? ✔️Ans - Cash (an asset) and a liability
account both increase.
In the context of the financial accounting cycle, what is the definition of an
account? ✔️Ans - A specific accounting record that provides an efficient
way to categorize similar types of transactions
What is an arm's-length transaction? ✔️Ans - An exchange between two
independent parties
Which event represents a transaction recorded as part of the financial
accounting cycle? ✔️Ans - 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
accounting equation does this particular transaction change? ✔️Ans -
Both assets and owners' equity
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