WGU D196 Exam | Principles of
Financial and Managerial Accounting
Exam | Questions and Answers Rated
A+ | 2024/2025 Guide
Accounting
- Correct Answer quantitive, financial & useful, decisions (based on past
info for better prediction of the future)
Decision-Making Process
- Correct Answer 1. Identify issue
2. Gather Info
- accounting decisions, how much will it cost?, ads? insurance?
Employee pay?
Accounting is the
- Correct Answer "language of business" used to record & report the
financial effects of business activities
Capital/ Financing
- Correct Answer the money a business uses to get the resources it
needs
- Buildings, equipment, etc
The money comes from:
1. Investors (owners)
2. Creditors (lenders)
3. Business itself in form of earnings that have been retained (stored)
,Accountants role in Business
- Correct Answer Measure & Report
- results of business activities
- what were our sales? Sales in the country? Worldwide?
-Specific data on aisel products
- Measures business events & reports it to the decision makers
Advice
-understand the flow of business, where the sales are
- well positioned to advise on company actions
- understands how they're buying the stuff their selling & where the $ is
coming from, knows what's been paid or not
- can become decision makers after expertise in accounting
2 Primary Areas of Accounting
- Correct Answer Managerial Accounting
- Internal quantitive info used for internal decision-making
- gathering & analysis of info for the internal decsion-making
- intended for those inside, who are making daily decisions
- product costs
- breakeven analysis
- budgeting
- performance evaluation
Financial Accounting
- external
- credit analysis
- regulatory uses (financial health of bank and insurance companies)
-the summary data of managerial/ internal/ secret stuff that is then
gathered, reported, & analyzed for those on the outside; investors &
creditors
- occasional decisions
,External reporting (financial accounting)
- Other external reports
- Ex: registration statements, income tax forms by the IRS
Financial Accounting
- Correct Answer common reporting platform, so that outsiders can
easily compare between companies
Regulators set the rules:
- GAAP (Generally Accepted Accounting Principles)
- FASB (Financial Accounting Standards Board)
- SEC (Securities and Exchange Commission)
- IASB (International Accounting Standards Board)
Management Accounting
- Correct Answer *allows you to know how to run your business better
Source- practices evolve, competitors see that it's working well and they
do the same
Purpose- exists to serve the competitive needs of a company, to be
better suited for the customers and markets, to do business better
Outcome- results in both financial and non-financial data, like employee
turnover, season, popular items, country, location
- proprietary (secret) not gonna give away my secrets
Financial Accounting
- Correct Answer *what are the results of how I did my business
Source- governed by rules, professional institutes
Purpose- exists as a scorecard for lendors and investors to know where
to spend their money
, Outcome- only financial data, available to the public, reported
consistently across companies for investors and creditors
Decision Making Using Management Accounting Data
- Correct Answer *Managers manage
Using management accounting data all throughout to make better
business decisions
*cycle!!!
Controlling
- create budgets
-create performance measures
- gather results
- compute variances (this is what we wanted you to do, this is what you
did do, lets get things in line)
Evaluating
-reward performance
-provide feedback
-identify problems and figure out how to move forward, then plan all over
again
Product line income statement
- Correct Answer an income statement that shows the operating income
of each product line, as well as the company as a whole
product-line profitability report
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