WGU D196 Objective Assessment Principles of
Financial & Managerial Accounting| Qs & As|
Grade A|
the production budget - VERIFIED VERIFIED ANSWERSales budget + ending finished goods inventory -
beginning finished goods inventory
direct materials production budget - VERIFIED VERIFIED ANSWERProduction budget × direct materials
per unit
the direct materials purchases budget - VERIFIED VERIFIED ANSWERDirect materials production budget +
ending direct materials inventory - beginning direct materials inventory
Cash collected from customers - VERIFIED VERIFIED ANSWER(current period revenue × current period
collection rate) + cash collected from previous period sales
Cash payments to suppliers - VERIFIED VERIFIED ANSWER(current period purchases × current period
payment rate) + cash paid on previous period purchases
Cost Variance - VERIFIED VERIFIED ANSWERDifference between actual costs and budgeted costs
Contribution Margin - VERIFIED VERIFIED ANSWER= Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales revenue available to cover
fixed costs and provide a profit.
Target Income - VERIFIED VERIFIED ANSWER= Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
,At break-even - VERIFIED VERIFIED ANSWERTarget income = 0
Sales Revenue - VERIFIED VERIFIED ANSWER= Sales Price x Number of Units
Variable Costs - VERIFIED VERIFIED ANSWER= Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity level.
Variable Cost Ratio x Sales Revenue - VERIFIED VERIFIED ANSWERVariable Costs
Unit-level activities - VERIFIED VERIFIED ANSWERActivities that take place each time a unit of product is
produced.
Batch-level activities - VERIFIED VERIFIED ANSWERActivities that take place in order to support a batch
or production run, regardless of the size of the batch.
Product-line Activities - VERIFIED VERIFIED ANSWERActivities that take place in order to support a
product line, regardless of the number of batches or individual units produced.
cost pool - VERIFIED VERIFIED ANSWERTotal cost being generated by a specific overhead cost activity.
cost driver - VERIFIED VERIFIED ANSWERA numerical measure used to reflect the amount of a specific
cost that is associated with a particular activity
Activity rate - VERIFIED VERIFIED ANSWERThe amount of the estimated cost pool divided by the
estimated number of cost driver events
How do expenses impact the accounting equation? - VERIFIED VERIFIED ANSWERExpenses decrease
owners' equity
Purpose of the accounting cycle? - VERIFIED VERIFIED ANSWERTo turn information about transactions
into financial statements
,How is gross profit computed? - VERIFIED VERIFIED ANSWERSales minus cost of good sold
Which type of account is retained earnings? - VERIFIED VERIFIED ANSWEREquity
How does a classified balance sheet provide useful info to a decision maker? - VERIFIED VERIFIED
ANSWERIt distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info for? -
VERIFIED VERIFIED ANSWERPlanning, controlling, evaluating
How could a period cost be reported in an income statement? - VERIFIED VERIFIED ANSWERAs an admin
expense
How are the wages of the cashiers classified in a merchandising company? - VERIFIED VERIFIED
ANSWERSelling expense
What is the label given to the quantity computed as estimated level of activity - VERIFIED VERIFIED
ANSWERPredetermined overhead rate
In a job order costing system, what is the proper accounting for a product cost? - VERIFIED VERIFIED
ANSWERIt is reported as a part of cost of goods sold
Which item is a period cost? - VERIFIED VERIFIED ANSWERUtility bills to heat the headquarters building
Accounting System - VERIFIED VERIFIED ANSWERThe procedures and processes used by a business to
analyze transactions, handle routine bookkeeping tasks, and structure information so it can be used to
evaluate the performance and health of the business.
Activity-based Costing (ABC) - VERIFIED VERIFIED ANSWERA method of attributing overhead costs to
products based on measurable factors that relate to activities that create overhead costs.
, Arm's-length Transaction - VERIFIED VERIFIED ANSWERA transaction in which a buyer and seller act
independently to get the best possible deal.
Articulation - VERIFIED VERIFIED ANSWERThe interrelationships among the financial statements.
Assets - VERIFIED VERIFIED ANSWEREconomic resources that are owned or controlled by a company.
Accounting Equation - VERIFIED VERIFIED ANSWERAn algebraic equation that expresses the relationship
between assets (resources), liabilities (obligations), and owner's equity (net assets, or the residual
interest in a business after all liabilities have been met): Assets = Liabilities + Owners' Equity.
Batch-level Activities - VERIFIED VERIFIED ANSWERActivities that take place in order to support a batch
or production run, regardless of the size of the batch.
Book Value - VERIFIED VERIFIED ANSWERThe value of a company measured by the amount of owner's
equity in the company.
Break Even - VERIFIED VERIFIED ANSWERTo make just enough income to cover costs without any profit
or loss.
Break-even Point - VERIFIED VERIFIED ANSWERThe amount of sales at which total costs of the number
of units sold equal total revenues; the point at which there is no profit or loss.
Budget - VERIFIED VERIFIED ANSWERA quantitative expression of a plan that shows how a firm or
organization will acquire and use resources over some specified period of time.
Business - VERIFIED VERIFIED ANSWERAn organization operated with the objective of making a profit
from the sale of goods or services.
Business Documents - VERIFIED VERIFIED ANSWERRecords of transactions used as the basis for
recording accounting entries; include invoices, check stubs, receipts, and similar business papers.
Financial & Managerial Accounting| Qs & As|
Grade A|
the production budget - VERIFIED VERIFIED ANSWERSales budget + ending finished goods inventory -
beginning finished goods inventory
direct materials production budget - VERIFIED VERIFIED ANSWERProduction budget × direct materials
per unit
the direct materials purchases budget - VERIFIED VERIFIED ANSWERDirect materials production budget +
ending direct materials inventory - beginning direct materials inventory
Cash collected from customers - VERIFIED VERIFIED ANSWER(current period revenue × current period
collection rate) + cash collected from previous period sales
Cash payments to suppliers - VERIFIED VERIFIED ANSWER(current period purchases × current period
payment rate) + cash paid on previous period purchases
Cost Variance - VERIFIED VERIFIED ANSWERDifference between actual costs and budgeted costs
Contribution Margin - VERIFIED VERIFIED ANSWER= Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales revenue available to cover
fixed costs and provide a profit.
Target Income - VERIFIED VERIFIED ANSWER= Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
,At break-even - VERIFIED VERIFIED ANSWERTarget income = 0
Sales Revenue - VERIFIED VERIFIED ANSWER= Sales Price x Number of Units
Variable Costs - VERIFIED VERIFIED ANSWER= Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity level.
Variable Cost Ratio x Sales Revenue - VERIFIED VERIFIED ANSWERVariable Costs
Unit-level activities - VERIFIED VERIFIED ANSWERActivities that take place each time a unit of product is
produced.
Batch-level activities - VERIFIED VERIFIED ANSWERActivities that take place in order to support a batch
or production run, regardless of the size of the batch.
Product-line Activities - VERIFIED VERIFIED ANSWERActivities that take place in order to support a
product line, regardless of the number of batches or individual units produced.
cost pool - VERIFIED VERIFIED ANSWERTotal cost being generated by a specific overhead cost activity.
cost driver - VERIFIED VERIFIED ANSWERA numerical measure used to reflect the amount of a specific
cost that is associated with a particular activity
Activity rate - VERIFIED VERIFIED ANSWERThe amount of the estimated cost pool divided by the
estimated number of cost driver events
How do expenses impact the accounting equation? - VERIFIED VERIFIED ANSWERExpenses decrease
owners' equity
Purpose of the accounting cycle? - VERIFIED VERIFIED ANSWERTo turn information about transactions
into financial statements
,How is gross profit computed? - VERIFIED VERIFIED ANSWERSales minus cost of good sold
Which type of account is retained earnings? - VERIFIED VERIFIED ANSWEREquity
How does a classified balance sheet provide useful info to a decision maker? - VERIFIED VERIFIED
ANSWERIt distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info for? -
VERIFIED VERIFIED ANSWERPlanning, controlling, evaluating
How could a period cost be reported in an income statement? - VERIFIED VERIFIED ANSWERAs an admin
expense
How are the wages of the cashiers classified in a merchandising company? - VERIFIED VERIFIED
ANSWERSelling expense
What is the label given to the quantity computed as estimated level of activity - VERIFIED VERIFIED
ANSWERPredetermined overhead rate
In a job order costing system, what is the proper accounting for a product cost? - VERIFIED VERIFIED
ANSWERIt is reported as a part of cost of goods sold
Which item is a period cost? - VERIFIED VERIFIED ANSWERUtility bills to heat the headquarters building
Accounting System - VERIFIED VERIFIED ANSWERThe procedures and processes used by a business to
analyze transactions, handle routine bookkeeping tasks, and structure information so it can be used to
evaluate the performance and health of the business.
Activity-based Costing (ABC) - VERIFIED VERIFIED ANSWERA method of attributing overhead costs to
products based on measurable factors that relate to activities that create overhead costs.
, Arm's-length Transaction - VERIFIED VERIFIED ANSWERA transaction in which a buyer and seller act
independently to get the best possible deal.
Articulation - VERIFIED VERIFIED ANSWERThe interrelationships among the financial statements.
Assets - VERIFIED VERIFIED ANSWEREconomic resources that are owned or controlled by a company.
Accounting Equation - VERIFIED VERIFIED ANSWERAn algebraic equation that expresses the relationship
between assets (resources), liabilities (obligations), and owner's equity (net assets, or the residual
interest in a business after all liabilities have been met): Assets = Liabilities + Owners' Equity.
Batch-level Activities - VERIFIED VERIFIED ANSWERActivities that take place in order to support a batch
or production run, regardless of the size of the batch.
Book Value - VERIFIED VERIFIED ANSWERThe value of a company measured by the amount of owner's
equity in the company.
Break Even - VERIFIED VERIFIED ANSWERTo make just enough income to cover costs without any profit
or loss.
Break-even Point - VERIFIED VERIFIED ANSWERThe amount of sales at which total costs of the number
of units sold equal total revenues; the point at which there is no profit or loss.
Budget - VERIFIED VERIFIED ANSWERA quantitative expression of a plan that shows how a firm or
organization will acquire and use resources over some specified period of time.
Business - VERIFIED VERIFIED ANSWERAn organization operated with the objective of making a profit
from the sale of goods or services.
Business Documents - VERIFIED VERIFIED ANSWERRecords of transactions used as the basis for
recording accounting entries; include invoices, check stubs, receipts, and similar business papers.
