WGU D196 Exam Questions Correctly
Answered New Update
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?
• 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?
• 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
Answered New Update
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?
• 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?
• 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
