WGU D196 Pre-Assessment
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. - ANS-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. -
ANS-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) - ANS-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 - ANS-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. - ANS-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 - ANS-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?
-Expenses decrease owners' equity.
-Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - ANS-Expenses decrease owners' equity.
What is the impact of expenses on the accounting equation?
-Expenses decrease owners' equity.
-Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - ANS-Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
-Asset
-Equity
-Expense
-Liability - ANS-Liability
What is the purpose of the financial accounting cycle?
-To turn information about transactions into financial statements
-To gather information related to the expenses and income generated by a company
-To produce and analyze a company's monthly bank statement
-To collect confidential information for management to use as a competitive tool -
ANS-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?
-Cash
-The sum of expenses and dividends
-Assets
-The sum of revenues and expenses - ANS-Assets
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