D196 WGU PRINCIPLES OF FINANCIAL AND
MANEGERIAL ACCOUNTING EXAM STUDY GUIDE
2024|BRAND NEW VERIFIED EXAM QUESTIONS
AND CORRECT ANSWERS ALL GRADED
A+|GUARANTEED SUCCESS|LATEST UPDATE 2024-
2025
bookkeeping - ANSWER-✔day to day keeping of transcations
steps of decision making - ANSWER-✔identify issue
gather information
identify alternatives
select option that most likely results in desired objective
accounting - ANSWER-✔analysis of events
record and report financial effects of business activities
where does capital come from (3) - ANSWER-✔investors
creditors(lenders)
business itself (from earnings retained)
2 main types of accounting - ANSWER-✔financial and managerial
managerial accounting - ANSWER-✔gather and analysis of information for internal
use and decision making.
financial accounting - ANSWER-✔gather, report, analysis of information for external
users- investors and creditors. summary of a business
what does managerial accounting review - ANSWER-✔product cost, breakeven
analysis, budgeting, performance analysis, outsource production
what does financial accounting review - ANSWER-✔credit analysis, financial health,
estimate value of the company
examples of external financial reports for financial accounting - ANSWER-✔annual
report, financial statement, balance sheet, income statement, statement of cash
flow
balance sheet - ANSWER-✔reports assets and liabilities. basic.
list as of a point in time. as of today, as of yesterday
,income statement - ANSWER-✔how much did you ,ake
period of time - from nov to jan
statement of cash flow - ANSWER-✔where did the cash come from and where did
the cash go
period of time - from nov to jan
lender - 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 - 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 - ANSWER-✔both financial and
managerial
fasb- what does it stand for, who are they and what do they do - 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 - 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 - ANSWER-✔generally accepted accounting principles
sec - ANSWER-✔Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair information about
publicly traded companies.
legal punishment
iasb - ANSWER-✔International Accounting Standards Board
develop international accounting standards. made up of members from many
countries
aicpa - 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 - 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
what is a balance sheet - ANSWER-✔statement of what they have and how they
financed it at a specific point in time.
balance sheet equation - ANSWER-✔assets = liabilities + owners equity
what are assets and examples - ANSWER-✔what they own or control that will
provide probable future benefits
cash, accts receivable, inventory, buildings, land.
what are liabilities and examples - 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 - 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 - ANSWER-✔decrease
does investments by owners increase or decrease owners equity - ANSWER-
✔increase
what is an income stmt - ANSWER-✔analyzes economic performance for a specific
period of time. statement of income. revenues, expenses, liabilities.
equation for net income - ANSWER-✔net income= revenues - expenses
does revenues increase or decrease net assets - ANSWER-✔increase
does expenses increase or decrease net assets - ANSWER-✔decrease
what is revenue - ANSWER-✔amount of assets created from sale.
products, membership, software, hardware, etc
what are expenses - ANSWER-✔amount of assets consumed in generating revenues.
wages, utilities, wholesale cost
if revenue exceeds expenses what happens - ANSWER-✔you get net income
if revenue is less than expenses paid, what happens - ANSWER-✔net loss
