WGU D196 Exam Questions and Answers 2024 New Update
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Course
WGU D196
Institution
WGU D196
WGU D196 Exam Questions and Answers 2024 New Update
What is the relevant range? - Answer-The range of volume over which the variable cost per unit is expected to remain the same
The relevant range is the range over which the variable cost per unit stays the same and the fixed cost remains the s...
WGU D196 Exam Questions and
Answers 2024 New Update
What is the relevant range? - Answer-The range of volume over which the variable cost
per unit is expected to remain the same
The relevant range is the range over which the variable cost per unit stays the same
and the fixed cost remains the same in total.
Which statement below is true with regard to variable costs? - Answer-Total variable
costs change in relationship to the volume of activity.
Which statement below is true with regard to fixed costs? - Answer-Total fixed costs do
not change in total within a relevant range of activity.
Why do companies allocate overhead costs based on estimated overhead numbers
instead of actual numbers? - Answer-Because overhead costs must be allocated
beginning the very first day of the period, but the actual numbers not available until the
end of the period
What must be true of a direct cost? - Answer-It is a cost traceable to a specific business
unit.
What must be true of an indirect cost? - Answer-It is a cost that cannot be traced to a
specific business unit or product.
If overhead is underapplied during a period, which statement below is true? - Answer-
The total cost of goods sold will be understated.
Which example correctly shows how contribution margin analysis is used by
management in making business decisions? - Answer-Contribution margin analysis
helps management evaluate whether to continue selling a product.
Which statement is true at the break-even point? - Answer-Total revenues equal total
costs.
What is true if the quantity sold for a product line is below the break-even point? -
Answer-The product line is operating at a loss.
What are differential costs? - Answer-Future costs that change as the result of a
decision
,What are sunk costs? - Answer-Past costs that cannot be changed by a current
decision
What is an example of an indirect cost in a hospital? - Answer-Utility costs for the
hospital building
Which statement is true at the break-even point? - Answer-Sales revenue - variable
costs - fixed costs = $0
What is the formula for the contribution margin? - Answer-Sales revenue - variable
costs
Accounting plays a vital role in the decision-making process. Which action is the first
step in the decision-making process? - Answer-Identify the issue.
1/1
The money that a company needs to buy its land, pay its employees, and buy its
supplies is called capital. What are the potential sources of capital for a business? -
Answer-Investors, creditors, and retained business earnings
Investors, creditors, and retained business earnings are all common sources of capital
for a business.
Which primary area of accounting generates reports for internal users? - Answer-
Management accounting generates reports for internal users, such as budgets and cost
analyses.
Which group uses financial information to evaluate whether a company will be able to
repay a loan? - Answer-Lenders
Which of the primary financial statements reports the resources, obligations, and
owner's equity of a company? - Answer-The balance sheet reports the resources of a
company (the assets), the company's obligations (the liabilities), and the owners' equity,
which represents the difference between what is owned (assets) and what is owed
(liabilities).
What is the role of the IASB in regulating accounting standards? - Answer-Establish
international accounting standards
The IASB establishes worldwide accounting standards. The IASB is a private
organization based in London. Currently, the IASB does not have legal authority to set
accounting standards for U.S. companies, although the SEC does allow the use of IASB
standards for non-U.S. companies with shares traded on U.S. stock exchanges. The
IASB is a standalone organization (overseen by a Board of Trustees); it is not under the
jurisdiction of the SEC, the European Union, the United Nations, or any other
governmental body. The IASB members represent a broad business constituency
including auditors, corporate accountants, analysts, and even accounting professors.
, What group of people make up the FASB? - Answer-People from a variety of business-
related backgrounds
What is the role of the GASB in setting accounting standards? - Answer-The GASB is a
private-sector organization that establishes accounting and financial reporting standards
for U.S. state and local governments.
In what way do accountants have an economic incentive to conduct themselves
ethically? - Answer-The value of the information produced by accountants is related to
the confidence that users have in the reliability of that information.
How is it possible for an accountant to intentionally deceive financial statement users
and yet still technically be in compliance with generally accepted accounting principles
(GAAP)? - Answer-There is flexibility inherent in the assumptions underlying the
preparation of financial statements.
Your boss approaches you with a concerning letter from the IRS and asks you to
explain the role of the IRS in regulating accounting standards. Based on the role of the
IRS, what could be the problem detailed in the letter? - Answer-The company has not
filed its taxes in accordance with the law.
Anika is considering investing in a tech company that is known for developing smart
home appliances. Before investing, Anika first wants to ensure that the company's past
financial performance has been satisfactory and that the company manages its cash
flows well. What type of accounting information would provide this evidence for Anika? -
Answer-Financial reports
Alliah Company just released its public accounting data for 20X9. Which user of
accounting information will monitor this data to ensure that the company is providing
sufficient information for investors? - Answer-Government agencies
A new product line manager approaches the accounting department in order to
understand the past performance of the product line he has been asked to manage in
the future. Which role of accounting involves obtaining and using financial information to
determine the financial health and performance of a business or product line? - Answer-
Evaluation
You read in the newspaper that a local company you are familiar with has been found
guilty in court of publishing financial statements that are false and misleading to users of
those financial statements. In this situation, what could the American Institute of
Certified Public Accountants (AICPA) do in response to the accountants who were
found guilty of unethical conduct in accounting practices? - Answer-Implement
professional sanctions
What is the correct summary sequence in the accounting cycle? - Answer-Analyze,
Record, Summarize, Prepare
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