What is the correct sequence of budgets in a manufacturing business? -Correct Answer Sales, production, direct materials
What is the effect of a company's accounting department maintaining high ethical standards? -Correct Answer The company's accounting information will increase in value.
Why...
WGU D196 Exam Study Questions and
Answers 2025
What is the correct sequence of budgets in a manufacturing business? -Correct Answer
✔Sales, production, direct materials
What is the effect of a company's accounting department maintaining high ethical
standards? -Correct Answer ✔The company's accounting information will increase in
value.
Why might employees be interested in their company's financial accounting
information? -Correct Answer ✔Financial statement data are often used in determining
employee bonuses.
Which group establishes financial accounting rules in the United States? -Correct
Answer ✔Financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements? -Correct Answer
✔Statement of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation? -Correct
Answer ✔Assets increase by $5,000; expenses increase by $5,000.
A company borrowed $80,000 cash from a bank. -Correct Answer ✔Assets increase by
$80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation? -Correct Answer
✔Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of? -
Correct Answer ✔Liability
What is the purpose of the financial accounting cycle? -Correct Answer ✔To gather
information related to the expenses and income generated by a company
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount? -Correct Answer ✔Assets
Which item is an expense item? -Correct Answer ✔Cost of goods sold
WGU D196 Exam
, WGU D196 Exam
How is gross profit computed? -Correct Answer ✔Sales minus cost of goods sold
Which type of account is retained earnings? -Correct Answer ✔Equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity? -Correct Answer ✔Paying Employees
How does a classified balance sheet provide useful information to a decision maker? -
Correct Answer ✔It distinguishes between current and long-term assets
What information does a balance sheet provide to a decision maker? -Correct Answer
✔Summary of the financial position of a company at a particular date
What is an account payable? -Correct Answer ✔The amount owed by a company that
purchased goods or services from a supplier on credit
Why is the net cash for December negative while total sales for December are the
highest out of the months from October through December? -Correct Answer ✔Total
cash available does not reflect December sales because there was a high volume of
credit sales.
Managerial Accounting -Correct Answer ✔focuses on the information needed for
planning, implementing plans, and controlling costs. For Internal decisions
Financial Accounting -Correct Answer ✔concerned with reporting financial information
to external parties, such as stockholders, creditors, and regulators
What is looked at in Managerial Accounting? -Correct Answer ✔~Product Costs
~Breakeven Analysis
~Budgeting
~Performance Evaluation
~Outsource Production
What is looked at in Financial Accounting? -Correct Answer ✔~Credit Analysis
~Regulatory Uses
~Estimate the Value of the Company
Balance Sheet -Correct Answer ✔~ List as of a point in time
~ Resources/ Assets
~ Obligations / Liabilities
Income Statement -Correct Answer ✔~ For a period of time (such as a year)
~ How much profit did we make?
WGU D196 Exam
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