D196 WGU- Principles of Financial and Managerial Accounting
Study set Exam with 180+ Questions and Elaborated Answers
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1. Accounting plays a vital role in the decision- x x x x x x x
making process. Which action is the first step in the decision-
x x x x x x x x x x
making process.: Identify the issues
x x x x
2. The money that a company needs to buy its land, pay its employees, and buy it
x x x x x x x x x x x x x x x
s supplies is called capital. What are the potential sources of capital for a busine
x x x x x x x x x x x x x x
ss.: Investors, creditors, and retained business earnings.
x x x x x x
3. Accountants measure and communicate the results of business activities.-
x x x x x x x x
: True
x
4. Which primary area of accounting generates reports for internal users.: -
x x x x x x x x x x
Management accounting x
5. Which group use financial information to evaluate whether a company will be
x x x x x x x x x x x x
able to repay a loan.: Lenders
x x x x x
6. Which of the primary financial statements reports the resources, obliga-
x x x x x x x x x
x tions, and owner's equity of a company: Balance sheet
x x x x x x x x
1x/x38
,7. What is the role of the IASB regulating accounting standards: Establish inter
x x x x x x x x x x x
national accounting standards x x
8. What group of people make up the FASB: People from a variety of business-re-
x x x x x x x x x x x x x
lated backgrounds
x x
9. What is the role of the GASB in setting accounting standards: The GSAB is a pri
x x x x x x x x x x x x x x x
vate-
sector organization the establishes accounting and financial reporting standards for
x x x x x x x x x x
the U.S. state and local governments
x x x x x
10. In what way do accountants have an economic incentive to conduct them-
x x x x x x x x x x x
x selves ethically: The value of the information produced by accountants is related to t
x x x x x x x x x x x x x
he confidence that users have in the reliability of that information
x x x x x x x x x x
11. How is it possible for an accountant to intentionally deceive financial statem
x x x x x x x x x x x
ent users and still technically be in compliance with generally accepted accountin
x x x x x x x x x x x
g principles (GAAP): There is flexibility inherent in the assumptions underlying the pre
x x x x x x x x x x x x
paration of financial statements x x x
12. Your boss has approached you with a concerning letter from the IRS and ask y
x x x x x x x x x x x x x x
ou to explain the role of the IRS in regulating accounting standards. Based on th
x x x x x x x x x x x x x x
e role of the IRS, what would be the problem detailed in the letter: The company h
x x x x x x x x x x x x x x x x
2x/x38
,as not filed its taxes in accordance to the law
x x x x x x x x x
13. Anika is considering investing in a tech company that is known for devel-
x x x x x x x x x x x x
x oping smart home appliances. Before investing, Annika first wants to ensure that
x x x x x x x x x x x
x the companies past performance has been satisfactory and that the company m
x x x x x x x x x x x
anages its cash flows well. What type of accounting information would provide th
x x x x x x x x x x x x
is evidence for Anika: Financial reports
x x x x x
14. Alliah company just released it's public accounting data for 2019. Which user
x x x x x x x x x x x x
of accounting information will monitor this data to ensure that the com-
x x x x x x x x x x x
x pany is providing sufficient information for investors.: Government agencies
x x x x x x x x
3x/x38
, 15. A new product line manager approaches the accounting department in or-
x x x x x x x x x x
x der to understand the past performance of the product line he has been asked to
x x x x x x x x x x x x x x x
manage in the future.Which role of accounting involves obtaining and using financi
x x x x x x x x x x x x
al information to determine the financial health and performance of a business o
x x x x x x x x x x x x
r product line?: Evaluation
x x x
16. You read in the newspaper that a local company you are familiar with has bee
x x x x x x x x x x x x x x
n found guilty in court of publishing financial statements that are false and mislead
x x x x x x x x x x x x x
ing to users of those financial statements. In this situation, what could the America
x x x x x x x x x x x x x
n Institute of Certified Public Accountants (AICPA) do in response to the accounta
x x x x x x x x x x x x
nts who were found guilty of unethical conduct in accounting practices?: Implem
x x x x x x x x x x x
ent professional sanctions
x x
17. What is the correct summary sequence in the accounting cycle?: Analyze, Rec
x x x x x x x x x x x
ord, Summarize, Prepare x x
18. Business documents, such as a sales invoice, a purchase order, or a check stub
x x x x x x x x x x x x x
, are an important part of the accounting process. From an accounting cycle stan
x x x x x x x x x x x x x
dpoint, what is purpose of business documents?: To confirm that a transaction has
x x x x x x x x x x x x
x occurred
19. What is the purpose of the financial accounting cycle?: To turn transactions into
x x x x x x x x x x x x x
4x/x38
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