WGU D196 Exam
D196- Principles of Financial and Managerial
Accounting Exam Study Guide Questions and
Answers 2025
bookkeeping -Correct Answer ✔day to day keeping of transcations
steps of decision making -Correct Answer ✔identify issue
gather information
identify alternatives
select option that most likely results in desired objective
accounting -Correct Answer ✔analysis of events
record and report financial effects of business activities
where does capital come from (3) -Correct Answer ✔investors
creditors(lenders)
business itself (from earnings retained)
2 main types of accounting -Correct Answer ✔financial and managerial
managerial accounting -Correct Answer ✔gather and analysis of information for internal
use and decision making.
financial accounting -Correct Answer ✔gather, report, analysis of information for
external users- investors and creditors. summary of a business
what does managerial accounting review -Correct Answer ✔product cost, breakeven
analysis, budgeting, performance analysis, outsource production
what does financial accounting review -Correct Answer ✔credit analysis, financial
health, estimate value of the company
examples of external financial reports for financial accounting -Correct Answer ✔annual
report, financial statement, balance sheet, income statement, statement of cash flow
balance sheet -Correct Answer ✔reports assets and liabilities. basic.
list as of a point in time. as of today, as of yesterday
income statement -Correct Answer ✔how much did you ,ake
period of time - from nov to jan
WGU D196 Exam
,WGU D196 Exam
statement of cash flow -Correct Answer ✔where did the cash come from and where did
the cash go
period of time - from nov to jan
lender -Correct Answer ✔lends money with intend to get it back plus interest. need
current income, existing obligations, existing assets, payroll stub, tax return, monthly
payments, bank stmts
investor -Correct Answer ✔buys into your company. looks at if the business is profitable,
what they are buying, buying obligations, potential future projections
what forms will the manager of a business use -Correct Answer ✔both financial and
managerial
fasb- what does it stand for, who are they and what do they do -Correct Answer
✔financial accounting standards board
private group, not govt agency, no legal authority, conducted of people from a variety of
business related backgrounds.
establishes financial accounting and reporting standards for private sector companies
1 of the two boards that make up GAAP
gasb- what does it stand for, who are they, what do they do -Correct Answer
✔governmental accounting standards board
sets accounting and financial reporting standards for state and legal governments.
authority over financial reporting by government entities
1 of the two boards that make up GAAP
gaap -Correct Answer ✔generally accepted accounting principles
sec -Correct Answer ✔Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair information about
publicly traded companies.
legal punishment
iasb -Correct Answer ✔International Accounting Standards Board
develop international accounting standards. made up of members from many countries
aicpa -Correct Answer ✔american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when acted unethically.
role and purpose of accounting -Correct Answer ✔accumulate and report on financial
information about performance, financial position, cash flow of a business. used to
reach decisions about how to manage the business, invest in it, or lend money to it
WGU D196 Exam
, WGU D196 Exam
what is a balance sheet -Correct Answer ✔statement of what they have and how they
financed it at a specific point in time.
balance sheet equation -Correct Answer ✔assets = liabilities + owners equity
what are assets and examples -Correct Answer ✔what they own or control that will
provide probable future benefits
cash, accts receivable, inventory, buildings, land.
what are liabilities and examples -Correct Answer ✔what we owe. obligations that
require future sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage, unearned revenue
what is owners equity and examples -Correct Answer ✔owners share, stockholders
equity, how much owner originally invested in business + how much profit they have left
capital stock- amt given by shareholders to obtain shares of stock(capital=$ so money
from stocks)
retained earnings- earnings retained in business, ex= net income
do dividends increase or decrease owners equity -Correct Answer ✔decrease
does investments by owners increase or decrease owners equity -Correct Answer
✔increase
what is an income stmt -Correct Answer ✔analyzes economic performance for a
specific period of time. statement of income. revenues, expenses, liabilities.
equation for net income -Correct Answer ✔net income= revenues - expenses
does revenues increase or decrease net assets -Correct Answer ✔increase
does expenses increase or decrease net assets -Correct Answer ✔decrease
what is revenue -Correct Answer ✔amount of assets created from sale.
products, membership, software, hardware, etc
what are expenses -Correct Answer ✔amount of assets consumed in generating
revenues.
wages, utilities, wholesale cost
if revenue exceeds expenses what happens -Correct Answer ✔you get net income
if revenue is less than expenses paid, what happens -Correct Answer ✔net loss
WGU D196 Exam
