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WGU D196 PRE-ASSESSMENT QUESTIONS & ANSWERS
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WGU D196 PRE-ASSESSMENT QUESTIONS & ANSWERS
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WGU D196 PRE-ASSESSMENT
QUESTIONS &
ANSWERS
What is the effect of a company's accounting department maintaining high ethical
standards?
-The company can report more favorable results in its financial statements.
-The company's accounting information will decrease in value.
-The company can hire fewer accountants to do the same amount of work.
-The company's accounting information will increase in value. - Answers-The company's
accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information?
-Financial statement data are used to record long term liabilities.
-Financial statement data provide detailed internal budget information.
-Financial statement data are often used in determining employee bonuses.
-Financial statement data provide item-by-item product cost information. - Answers-
Financial statement data are often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States?
-Internal Revenue Service (IRS)
-American Institute of Certified Public Accountants (AICPA)
-Financial Accounting Standards Board (FASB)
, -International Accounting Standards Board (IASB) - Answers-Financial Accounting
Standards Board (FASB)
Which report is one of the three primary financial statements?
-Statement of stakeholder funds
-Statement of cash flows
-Statement of the accounting cycle
-Statement of management accounting - Answers-Statement of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
-Assets decrease by $5,000; expenses increase by $5,000.
-Assets decrease by $5,000; liabilities increase by $5,000.
-Assets decrease by $5,000; revenues increase by $5,000.
-Assets increase by $5,000; expenses increase by $5,000. - Answers-Assets decrease
by $5,000; expenses increase by $5,000.
What is a transaction?
-Two parties exchanging something of value
-An example of an online business document
-A type of commonly used accounting software
-A category of merchandiser or retailer - Answers-Two parties exchanging something of
value
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount?
-Cash
-The sum of expenses and dividends
-Assets
-The sum of revenues and expenses - Answers-Assets
Which item is an expense item?
-Accounts receivable
-Accounts payable
-Cost of goods sold
-Loans payable - Answers-Cost of goods sold
How is gross profit computed?
-Sales minus cost of goods sold
-Total revenues minus total expenses
-Accounts receivable minus accounts payable
-Total assets minus total liabilities - Answers-Sales minus cost of goods sold
Which type of account is retained earnings?
-Liability
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