WGU D774
WGU D774 Intro to Business Accounting | OA |
Objective Assessment | 2026 Update | 100% Correct.
Testbankscove
,WGU D774 Intro to Business Accounting _ Quizlet.pdf (with Answers)
Page 1
1. Which item is listed first on the income statement?
Assets
Retained earnings
Net income
Revenues
Rationale: The income statement follows a basic format: Revenues are listed
first, followed by expenses. Net income (Revenue - Expenses) is the final
result, not the first item. Assets and retained earnings are on the balance
sheet.
2. When is it appropriate for a company to use process costing?
When the company produces a large volume of unique items using a series of
item-specific processes
When the company produces custom-made products only when an order is
received from a customer
When the company produces a large volume of products using a series of
uniform processes
, Rationale: Process costing is used for mass production of homogeneous
(identical) products, such as oil, soda, or paper, where costs are averaged
over many identical units.
When the company produces a small volume of unique items using a series of
item-specific processes
3. Which item is reported in an income statement?
Liabilities
Dividends
Revenues
Rationale: The income statement reports the financial performance of a
company over a period of time, showing revenues earned and expenses
incurred. Liabilities and assets are reported on the balance sheet. Dividends
are reported in the statement of retained earnings or statement of
stockholders' equity.
Assets
Page 2
4. Which characteristic is an advantage of zero-based budgeting?
Creates the same budget as in the previous year
Eliminates the need for cash planning
Requires that every cost be justified
Rationale: The core principle of zero-based budgeting (ZBB) is that all
expenses must be justified for each new budget period, starting from a "zero
base." This helps eliminate unnecessary costs.
Reduces the need for detailed expense tracking
5. Which statement represents a major disadvantage of an incremental budget?
It reduces production efficiency due to increased labor costs.
It forces all production departments to cut their costs each year.
It requires the assumption that this period is very similar to last period.
WGU D774 Intro to Business Accounting | OA |
Objective Assessment | 2026 Update | 100% Correct.
Testbankscove
,WGU D774 Intro to Business Accounting _ Quizlet.pdf (with Answers)
Page 1
1. Which item is listed first on the income statement?
Assets
Retained earnings
Net income
Revenues
Rationale: The income statement follows a basic format: Revenues are listed
first, followed by expenses. Net income (Revenue - Expenses) is the final
result, not the first item. Assets and retained earnings are on the balance
sheet.
2. When is it appropriate for a company to use process costing?
When the company produces a large volume of unique items using a series of
item-specific processes
When the company produces custom-made products only when an order is
received from a customer
When the company produces a large volume of products using a series of
uniform processes
, Rationale: Process costing is used for mass production of homogeneous
(identical) products, such as oil, soda, or paper, where costs are averaged
over many identical units.
When the company produces a small volume of unique items using a series of
item-specific processes
3. Which item is reported in an income statement?
Liabilities
Dividends
Revenues
Rationale: The income statement reports the financial performance of a
company over a period of time, showing revenues earned and expenses
incurred. Liabilities and assets are reported on the balance sheet. Dividends
are reported in the statement of retained earnings or statement of
stockholders' equity.
Assets
Page 2
4. Which characteristic is an advantage of zero-based budgeting?
Creates the same budget as in the previous year
Eliminates the need for cash planning
Requires that every cost be justified
Rationale: The core principle of zero-based budgeting (ZBB) is that all
expenses must be justified for each new budget period, starting from a "zero
base." This helps eliminate unnecessary costs.
Reduces the need for detailed expense tracking
5. Which statement represents a major disadvantage of an incremental budget?
It reduces production efficiency due to increased labor costs.
It forces all production departments to cut their costs each year.
It requires the assumption that this period is very similar to last period.
