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 w...
WGU D196 Pre-Assessment Test
Questions and Answers 2025
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. -Correct Answer ✔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. -Correct
Answer ✔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) -Correct Answer ✔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 -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?
-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. -Correct Answer ✔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
WGU D196 Exam
, WGU D196 Exam
-A category of merchandiser or retailer -Correct Answer ✔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. -Correct Answer ✔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. -Correct Answer ✔Expenses decrease owners'
equity.
Which type of account are accounts payable and notes payable both examples of?
-Asset
-Equity
-Expense
-Liability -Correct Answer ✔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 -
Correct Answer ✔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 -Correct Answer ✔Assets
Which item is an expense item?
-Accounts receivable
-Accounts payable
-Cost of goods sold
-Loans payable -Correct Answer ✔Cost of goods sold
WGU D196 Exam
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