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WGU D196 PRE-ASSESSMENT PRINCIPLES
OF FINANCIAL & MANAGERIAL
ACCOUNTING NEWEST EXAM |ALL
QUESTIONS AND VERIFIED ANSWERS |
RATED A+
Which type of account are accounts payable and notes payable both
examples of?
Liability
Expense
Asset
Equity - ANSWER- Liability
What is the purpose of the financial accounting cycle?
To turn information about transactions into financial statements
To gather information related to the expenses and income generated by a
company
To produce and analyze a company's monthly bank statement
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To collect confidential information for management to use as a
competitive tool - 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?
The sum of expenses and dividends
Cash
Assets
The sum of revenues and expenses - ANSWER- Assets
Which item is an expense item?
Cost of goods sold
Loans payable
Accounts receivable
Accounts payable - ANSWER- Cost of goods sold
How is gross profit computed?
Total revenues minus total expenses
Sales minus cost of goods sold
Accounts receivable minus accounts payable
Total assets minus total liabilities - ANSWER- Sales minus cost of
goods sold
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Which type of account is retained earnings?
Revenue
Asset
Equity
Liability - ANSWER- Equity
For purposes of cash flow classification in the statement of cash flows,
which item is an operating activity?
Buying equipment
Selling bonds
Distributing dividends
Paying employees - ANSWER- Paying employees
How does a classified balance sheet provide useful information to a
decision maker?
It distinguishes between current and long-term assets.
It provides data for a period of time instead of as a point in time.
It distinguishes liabilities from expenses.
It provides data that are not publicly disclosed. - ANSWER- It
distinguishes between current and long-term assets.
WGU D196 PRE-ASSESSMENT PRINCIPLES
OF FINANCIAL & MANAGERIAL
ACCOUNTING NEWEST EXAM |ALL
QUESTIONS AND VERIFIED ANSWERS |
RATED A+
Which type of account are accounts payable and notes payable both
examples of?
Liability
Expense
Asset
Equity - ANSWER- Liability
What is the purpose of the financial accounting cycle?
To turn information about transactions into financial statements
To gather information related to the expenses and income generated by a
company
To produce and analyze a company's monthly bank statement
,2|Page
To collect confidential information for management to use as a
competitive tool - 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?
The sum of expenses and dividends
Cash
Assets
The sum of revenues and expenses - ANSWER- Assets
Which item is an expense item?
Cost of goods sold
Loans payable
Accounts receivable
Accounts payable - ANSWER- Cost of goods sold
How is gross profit computed?
Total revenues minus total expenses
Sales minus cost of goods sold
Accounts receivable minus accounts payable
Total assets minus total liabilities - ANSWER- Sales minus cost of
goods sold
, 3|Page
Which type of account is retained earnings?
Revenue
Asset
Equity
Liability - ANSWER- Equity
For purposes of cash flow classification in the statement of cash flows,
which item is an operating activity?
Buying equipment
Selling bonds
Distributing dividends
Paying employees - ANSWER- Paying employees
How does a classified balance sheet provide useful information to a
decision maker?
It distinguishes between current and long-term assets.
It provides data for a period of time instead of as a point in time.
It distinguishes liabilities from expenses.
It provides data that are not publicly disclosed. - ANSWER- It
distinguishes between current and long-term assets.
