WGU D196 Exam Questions With Answers Latest Update | GRADED A+

Accounting - ANSWER A system for providing quantitative, financial information about economic entities that is useful for making sound economic decisions. Accounting provides the means of recording and communicating business activities and the results of those activities. Accounting Cycle - ANSWER The procedure for analyzing, recording, summarizing, and reporting the transactions of a business. Accounting Equation - ANSWER An algebraic equation that expresses the relationship between assets (resources), liabilities (obligations), and owner's equity (net assets, or the residual interest in a business after all liabilities have been met): Assets = Liabilities + Owners' Equity. Accounting System - ANSWER Equity. The procedures and processes used by a business to analyze transactions, handle routine bookkeeping tasks, and structure information so it can be used to evaluate the performance and health of the business. Activity-based Costing (ABC) - ANSWER A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs. Actual Manufacturing Overhead - ANSWER Manufacturing costs other than direct materials and direct labor. American Institute of Certified Public Accountants arli (AICPA) - ANSWER A professional organization for CPAS in which membership is voluntary. Annual Report - ANSWER A document that summarizes the results of operations and financial status of a company for the past year and outlines future plans. Applied Manufacturing Overhead - ANSWER The amount of the manufacturing overhead that is assigned to the goods produced. This is usually done by using a predetermined annual overhead rate. Comparative Financial Statements - ANSWER Financial statements that include information for both the current year and preceding year(s) that are prepared for users to identify any significant changes in particular items. Contribution Margin - ANSWER The difference between total sales and variable costs; the portion of sales revenue available to cover fixed costs and provide a profit. Contribution Margin (formula) - ANSWER Sales Revenue - Variable cost Contribution Margin per Unit (formula) - ANSWER Sales per unit - Variable cost per unit Contribution Margin Ratio (formula) - ANSWER Contribution Margin per unit/sales per unit Net Income Formula - ANSWER Revenues - Expenses Variable Cost Ratio (formula) - ANSWER Variable cost per unit/sales per unit Break Even in Units - ANSWER fixed costs / contribution margin per unit break even in dollars - ANSWER Fixed cost/contribution margin ratio Target Net Income (formula) - ANSWER (Fixed cost + target income) / contribution margin per unit What is the C-V-P equation (basic formula) - ANSWER Sales Revenue - Variable Cost - Fixed Cost = Profit Controllable Costs - ANSWER Costs over which a manager has direct authority and can change. Controlling - ANSWER Tracking the actual performance of a company. Cost Accountant - ANSWER An accountant who is specially trained to prepare and analyze accounting information for internal decision-making. Cost Behavior - ANSWER The way a cost is affected by changes in activity levels. Cost Center - ANSWER An organizational unit in which a manager has control over and is held accountable for cost performance. Cost Center - ANSWER An organizational unit in which a manager has control over and is held accountable for cost performance. Cost drivers are - ANSWER A numerical measure used to reflect the amount of a specific cost that is associated with a particular activity. Cost Objects - ANSWER An output of a business, such as a product, service, or division. cost pool - ANSWER Total cost being generated by a specific overhead cost activity. Cost Variance - ANSWER A difference between the actual cost and the budgeted cost. Cost of Goods Manufactured Statement - ANSWER A schedule supporting the income statement that summarizes the total cost of goods manufactured and transferred out of the work-inprocess inventory account during a period. These costs include direct materials, direct labor, and applied manufacturing overhead. Cost of Goods Sold Statement - ANSWER A statement that sums the cost of goods sold for an accounting period based on the cost of goods sold formula. Cost-volume-profit (C-V-P) Analysis - ANSWER Techniques for determining how changes in revenues, costs, and level of activity affect the profitability of an organization. Current Assets - ANSWER Cash and other assets that are expected to be converted to cash within a year. Current Liabilities - ANSWER Liabilities expected to be satisfied within a year or the current operating cycle, whichever is longer. Decentralized Company - ANSWER An organization in which managers at all levels have the authority to make decisions mp concerning the operations for which they are responsible. Differential Costs - ANSWER Future costs that change as a result of a decision; also called incremental or relevant cost Direct Costs - ANSWER Costs that are specifically traceable to a unit of business or segment being analyzed. Direct Labor - ANSWER Wages paid to those who physically work on direct materials to transform them into a finished product and are traceable to specific products. Direct Labor Budget product - ANSWER A schedule of direct labor requirements for the budget period. Direct Materials - ANSWER Materials that become part of the product and are traceable to it. Direct Materials Budget - ANSWER A schedule of direct materials to be used during the budget period and direct materials to be purchased during that period. Dividends - ANSWER A sum of money distributed to the owners (stockholders) of a corporation. Earnings (Loss) Per Share (EPS) - ANSWER The amount of net income (earnings) related to each share of stock; computed by dividing net income by the number of shares of stock outstanding during this period. Economy of Scale - ANSWER A pattern of decreasing costs per unit as unit volume increases Estimated Manufacturing Overhead - ANSWER Budgeted manufacturing overhead costs that are used to establish the predetermined overhead rate. Ethics - ANSWER The basic moral principles that govern an individual's behavior. Evaluating - ANSWER Analyzing results, rewarding performance, and identifying problems. Expenses - ANSWER The amount of assets consumed through business operations; the costs incurred in normal business operations to generate revenues. External Transaction - ANSWER An exchange that occurs between a company & external party & that is recorded in the financial records of the company. Financial Accounting - ANSWER The area of accounting concerned with reporting financial information to interested external parties Financial Accounting Standards Board (FASB) - ANSWER The organization responsible for studying accounting issues & establishing accounting standards to govern financial reporting in the United States. Financial Statement Analysis - ANSWER The examination of both the relationships among financial statement numbers & the trends in those numbers over time, Financial Statements - ANSWER financial Reports such as the balance sheet, income statement, and statement of cash flows, which summarize the financial status and results of operations of a business entity. Financing Activities - ANSWER Activities whereby cash is obtained from or repaid to owners and creditors. Finished Goods Inventory - ANSWER Inventory that has completed the production process and is ready for sale to customers. Fixed Costs - ANSWER Costs that remain constant in total, regardless of activity level, over a certain range of activity. Form 10-K - ANSWER A form required by the SEC for businesses to report a comprehensive summary of financial perfomance, including the three primary financial statements. Form 10-Q - ANSWER Quarterly financial reports that publicly traded companies must file with the SEC. Gains - ANSWER Money made on activities outside the normal business of a company. Generally Accepted Accounting Principles (GAAP) - ANSWER Authoritative guidelines that define accounting practice at a particular time United States, Governmental Accounting Standards Board (GASB) - ANSWER An independent private organization that sets the accounting & financial reporting standards for state & local governments following GAAP Gross Profit - ANSWER Sales Revenue-Cost of Goods Sold Actual Manufacturing Overhead - ANSWER Direct Material, Direct Labor, Manufacturing Overhead What is a mixed cost? - ANSWER A cost that includes both a fixed portion & a variable portion Gross Margin - ANSWER The difference between sales and cost of goods sold; gross profit. Gross Profit - ANSWER The difference between sales and cost of goods sold; gross margin. Horizontal Analysis - ANSWER A method of financial statement analysis that compares a firm's results from year to year. Illiquid - ANSWER Assets that take time and effort to convert into cash. Income Statement - ANSWER The financial statement that reports the amount of net income earned by a company during a period. Indirect Costs - ANSWER Costs normally incurred for the benefit of several segments within the organization; sometimes called common costs or joint costs Indirect Labor - ANSWER Labor that is necessary to a manufacturing or service business but is not directly related to the actual production of the product. Indirect Materials - ANSWER Materials that are necessary to a manufacturing or service business but not directly included in or are not a significant part of the actual product. Internal Revenue Service (IRS) - ANSWER A government agency that prescribes the rules and regulations that govern the collection of tax revenues in the United States. Internal Transaction - ANSWER A transaction that occurs within a company, does not involve an external party, and not recorded in the company's financial records. International Accounting Standards Board (IASB) - ANSWER A committee formed to develop international accounting standards. Investing Activities - ANSWER Activities associated with buying and selling long-term assets. Investment Center - ANSWER An organizational unit in which a manager has control over & is held accountable for cost, revenue, and asset performance Job - ANSWER An individual product produced or service rendered in a job order costing system. Job Order Costing - ANSWER A method of product costing that assigns costs to specific jobs or products Job Order Costing - ANSWER Overhead is allocated based on custom job activity Liabilities - ANSWER Obligations to pay cash, transfer other assets, or provide services to someone else. Liquid - ANSWER Assets that are in the form of cash or can be easily converted into cash. Long-term Assets - ANSWER Assets that are illiquid and that are needed to operate a business over an extended period of time. Long-term Liabilities - ANSWER Liabilities that are not expected to be satisfied within a year. Management Accounting - ANSWER The area of accounting concerned with providing internal financial reports to assist management in making decisions. Manufacturing Business - ANSWER Any organization whose main economic activity involves using components or raw materials to make finished goods for sale to customers. Manufacturing Overhead - ANSWER All costs incurred in the manufacturing process other than direct materials and direct labor Manufacturing Overhead Budget - ANSWER A schedule of production costs other than those for direct labor and direct materials. Market Value - ANSWER The value of a company as measured by the number of shares of stock outstanding multiplied by the current market price of the stock; the current value of a business. Master Budget - ANSWER A network of many separate schedules and budgets that together constitute the overall operating and financing plan for the coming operating period. Merchandising Business - ANSWER Any organization whose main economic activity involves purchasing finished goods and reselling them to customers Mixed Costs - ANSWER Costs that contain both variable and fixed costs components. Net Income Formula - ANSWER Sales - variable cost - fixed cost Noncontrollable Costs - ANSWER Costs over which a manger does not have direct authority & cannot change. Nonprofit Organization - ANSWER An entity without a profit objective, oriented toward providing services efficiently & effectively Operating Activities - ANSWER Activities that are part of the day-to-day business of a company Operating Activities - ANSWER Activities that are part of the day-to-day business of a company Operating Capital - ANSWER Funds available for use in financing the day-to-day activities of a business. Operating Income - ANSWER A line on the income statement that reports the results of what a company does on a daily basis; calculated by sales - cost of goods sold - operating expenses