What is the effect of a company's accounting department maintaining high ethical standards?
A)The company can hire fewer accountants to do the same amount of work
B)The company can report more favorable results in its financial statements.
C)The company's accounting information will increase i...
WGU D196 Study Guide Questions and
Answers 2025
What is the effect of a company's accounting department maintaining high ethical
standards?
A)The company can hire fewer accountants to do the same amount of work
B)The company can report more favorable results in its financial statements.
C)The company's accounting information will increase in value.
D) The company's accounting information will decrease in value. -Correct Answer ✔C)
The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information?
A) Financial statement data provide item-by-item product cost information.
B) Financial statement data are often used in determining employee bonuses.
C) Financial statement data are used to record long term liabilities.
D) Financial statement data provide detailed internal budget information. -Correct
Answer ✔Financial statement data are often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States?
A) International Accounting Standards Board (IASB)
B) Internal Revenue Service (IRS)
C) Financial Accounting Standards Board (FASB)
D) American Institute of Certified Public Accountants (AICPA) -Correct Answer
✔Financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements?
A) Statement of management accounting
B) Statement of the accounting cycle
C) Statement of stakeholder funds
D) Statement of cash flows -Correct Answer ✔Statement of cash flows
WGU D196 Exam
,WGU D196 Exam
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
A) Assets increase by $5,000; expenses increase by $5,000.
B) Assets decrease by $5,000; revenues increase by $5,000.
C) Assets decrease by $5,000; expenses increase by $5,000.
D) Assets decrease by $5,000; liabilities increase by $5,000. -Correct Answer ✔Assets
decrease by $5,000; expenses increase by $5,000.
What is the transactional model?
A) Two parties exchanging something of value
B) A type of commonly used accounting software
C) A category of merchandiser or retailer
D) An example of an online business document -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?
A) Assets increase by $80,000; revenues increase by $80,000.
B) Assets increase by $80,000; liabilities increase by $80,000.
C) Assets increase by $80,000; liabilities decrease by $80,000.
D) Assets increase by $80,000; owners' equity increases by -Correct Answer ✔Assets
increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Which type of account are accounts payable and notes payable both examples of?
A) Liability
B) Asset
C) Equity
D) Expense -Correct Answer ✔Liability
What is the purpose of the financial accounting cycle?
A) To turn information about transactions into financial statements
B) To collect confidential information for management to use as a competitive tool
C) To produce and analyze a company's monthly bank statement
D) To gather information related to the expenses and income generated by a company -
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?
A) The sum of expenses and dividends
B) Cash
C) The sum of revenues and expenses
D) Assets -Correct Answer ✔Assets
Which item is an expense item?
A) Cost of goods sold
B) Loans payable
C) Accounts payable
D) Accounts receivable -Correct Answer ✔Cost of goods sold
WGU D196 Exam
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