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WGU D196 Pre-Assessment || with A+ Guaranteed Solutions.
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What is the effect of a company's accounting department maintaining high ethical standards? correct answers The company's accounting information will increase in value. Why might employees be interested in their company's financial accounting information? correct answers Financial statement data...

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  • August 26, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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WGU D196 Pre-Assessment || with A+ Guaranteed
Solutions.
What is the effect of a company's accounting department maintaining high ethical standards?
correct answers The company's accounting information will increase in value.

Why might employees be interested in their company's financial accounting information? correct
answers Financial statement data are often used in determining employee bonuses.

Which group establishes financial accounting rules in the United States? correct answers
Financial Accounting Standards Board (FASB)

Which report is one of the three primary financial statements? correct 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? correct answers
Assets decrease by $5,000; expenses increase by $5,000.

What is a transaction? correct answers Two parties exchanging something of value

A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing company? correct
answers Expenses decrease owners' equity.

What is the impact of expenses on the accounting equation? correct answers Expenses decrease
owners' equity.

Which type of account are accounts payable and notes payable both examples of? correct
answers Liability

What is the purpose of the financial accounting cycle? correct answers To turn information about
transactions into financial statements

According to the accounting equation, the amount of liabilities and equity must always be equal
to another amount.
What is that other amount? correct answers Assets

Which item is an expense item? correct answers Cost of goods sold

How is gross profit computed? correct answers Sales minus cost of goods sold

Which type of account is retained earnings? correct answers Equity

, For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity? correct answers Paying employees

How does a classified balance sheet provide useful information to a decision maker? correct
answers It distinguishes between current and long-term assets.

What information does a balance sheet provide to a decision maker? correct answers Summary
of the financial position of a company at a particular date

What is an account payable? correct answers The amount owed by a company that purchased
goods or services from a supplier on credit

What is an example of a financial cost that would result from poor direct labor budgeting and
planning? correct answers Increased hiring, training, and overtime costs

What does a manager have control over in a cost center? correct answers Costs

What should be considered when developing a measure to evaluate the performance of a
manager? correct answers Only controllable costs

In some companies, the performance measures for profit center managers are heavily influenced
by cost allocations downward from organizational units (such as company headquarters).
Why is this a mistake? correct answers Uncontrollable costs should not be included in the
performance evaluation measure of a profit center manager.

Which budget should include the expected cost of supplies used by the office staff of the
corporate headquarters? correct answers Administrative expense budget

Which items are uncontrollable, external variables that make it difficult to forecast the level of
sales? correct answers Customer tastes and economic conditions

What is the correct sequence of budgets in a manufacturing business? correct answers Sales,
production, direct materials

Which type of business organization has a major focus on direct materials, direct labor, and
overhead? correct answers Manufacturing

What are the three primary functions that company managers use managerial accounting
information for? correct answers Planning, controlling, and evaluating

What is the proper accounting for a product cost? correct answers Record as an inventory cost
until the item is sold

How could a period cost be reported in an income statement? correct answers As an
administrative expense

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