WGU D196 EXAM QUESTIONS AND ANSWERS
What are organizational segments? - Answer-Organizational segments are parts of an organization that require a separate report for evaluation by management.
What is responsibility accounting and how does it impact an organization? - Answer-Responsibility acc...
WGU D196 EXAM QUESTIONS AND
ANSWERS
What are organizational segments? - Answer-Organizational segments are parts of an
organization that require a separate report for evaluation by management.
What is responsibility accounting and how does it impact an organization? - Answer-
Responsibility accounting is a system of evaluating a performance in which managers
are held accountable for the costs, revenues, assets, or other elements in which they
have control over.
Responsibility accounting impacts an organization because it gives complete
accountability of cost loss and cost profit to the manager
What do responsibility centers represent? - Answer-Responsibility centers represent
Profit and Cost centers.
What are profit and cost centers and why do they matter? - Answer-Profit Center: A
profit center is an organizational unit in which a manager has control over and is held
accountable for BOTH cost and revenue performances.
Cost Center: A cost center is an organizational unit in which a manager has control over
and is held accountable for ONLY cost performance, and only for what a manager can
control.
Both matter because it gives the managers control of what to do with the money, and
any mistake they make could hurt the business.
Can you identify specific examples of each? - Answer-Profit Center: An example of a
profit center is a store manager for a fast-food restaurant.
Cost Center: An example of a cost center is a department supervisor in a factory
Can you explain how segment margin statements work and what purpose do they serve
in performance evaluation? - Answer-A segment margin statement works by showing
the profits and losses that are directly chargeable to a segment and divides them into
variable and fixed cost behavior patterns.
A segment margin statements purpose in performance evaluation is to give a good
picture of the strengths and weaknesses of a company.
What is cost variance? - Answer-A cost variance is the difference between the actual
cost and the budgeted cost
, What are Indirect and Direct Costs? - Answer-Indirect Cost(Common Costs): Indirect
costs are costs that are usually shared among segments of an organization.
Examples: Salaries, depreciation, and quality control costs.
Direct Costs: Direct costs are costs that are traceable to a business unit or segment of
an organization.
Examples: Direct Labor, and Direct Materials
What is Managerial Accounting and how does it differ from Financial Accounting? -
Answer-Managerial Accounting: The gathering of information for internal decision
making(secret information not released to the public).
Financial Accounting: The gathering, analyzing, and reporting of information for the
benefit of external users(such as investors and creditors).
Financial accounting information is prepared according to the GAAP
The way these two differ is that managerial accounting is information for the inside, only
for the business to know about. Whereas financial accounting is made for anyone to
know, such as the external users(Investors).
Can you explain the concepts of planning, evaluating, and controlling, as it relates to
decision-making? - Answer-Planning: Outlining activities that need to be performed for
an organization to achieve its objective.
Evaluating: Analyzing results, providing feedback, rewarding performances, and
identifying problems.
Controlling: Tracking the performance of a company.
Who provides accounting information? - Answer-Internal users such as employees,
managers, and accountants
Who uses accounting information? - Answer-people who use accounting information are
bankers, stakeholders, investors, and managers.
What is the role and purpose of accounting ? - Answer-Role: To help track income and
expenditures, and to provide investors, management, and government with financial
information.
Purpose: To accumulate, measure, and communicate financial information about
businesses and other organizations.
· Who uses accounting information and why? - Answer-Potential investors and creditors
use accounting information, but basically everyone uses accounting information. They
use it to make internal and external business decisions.
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