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WGU D196 Pre-Assessment Practice Questions and Answers 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 comp...

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  • November 11, 2024
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  • 2024/2025
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WGU D196 Pre-Assessment Practice

Questions and Answers


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. - 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. - 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)



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-Financial Accounting Standards Board (FASB)


-International Accounting Standards Board (IASB) - 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 - 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. - 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


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-A category of merchandiser or retailer - 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. - 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. - ANSWER✔✔-Expenses decrease owners' equity.


Which type of account are accounts payable and notes payable both examples of?


-Asset


-Equity


-Expense


-Liability - ANSWER✔✔-Liability


What is the purpose of the financial accounting cycle?



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