WGU D196 Principles of Financial & Managerial
Accounting Exam Prep – 163 Verified Questions &
Answers | Latest Update 2026 | Exam Q&A PDF | 100%
Pass Guarantee
1. The focus of managerial accounting is on the needs of ___ _.
the organization's competitors
users inside the organization
governmental agencies
interested parties outside the organization
2. Describe the role of a manager in an investment center and how it differs
from other types of responsibility centers.
A manager in an investment center is responsible for external financial
reporting.
A manager in an investment center only oversees revenue generation
without managing costs.
A manager in an investment center controls costs, revenues, and
investments, unlike other centers that may focus solely on revenues
or costs.
A manager in an investment center focuses on employee
performance rather than financial metrics.
3. What is owner's equity?
What a company owes
None of the choices are correct
What a company owns
, What remains after the liabilities are satisfied
4. What does owner's equity represent in a business?
The owner's share in the business, including the initial investment
and retained earnings.
The expenses incurred by the business.
The total liabilities of the business.
The revenue generated by the business.
5. What does 'cost of goods sold' specifically include?
Total revenue generated from sales
Indirect costs related to marketing and sales
Direct costs attributable to the production of goods sold
Administrative expenses incurred by the company
6. What type of information does a cost accountant primarily prepare?
Financial statements for public reporting
Tax returns for external stakeholders
Investment portfolios for clients
Accounting information for internal decision-making
7. Liabilities are:
saving minus investment.
anything of value one owns.
the debts one owes.
current income minus spending on current needs.
,8. If a company identifies a department as a cost center, what implications does
this have for the manager of that department?
The manager has no control over the expenses of the department.
The manager is responsible for managing and controlling the costs
incurred by that department.
The manager is required to prepare the company's financial
statements.
The manager must focus on increasing revenue generated by the
department.
9. Describe the significance of long term liabilities in financial statements.
Long term liabilities are only important for tax purposes and have no
impact on cash flow.
Long term liabilities are the same as current liabilities and are due
within a year.
Long term liabilities represent a company's future financial
obligations and impact its long-term financial health.
Long term liabilities are irrelevant to financial statements and do not
affect decision-making.
10. How are people who lend money to others compensated?
They pay a commission to the borrower.
They receive a commission on the amount borrowed.
They charge interest to the borrower.
They charge an investment fee to the borrower.
11. What information does the Balance Sheet ( Statement of financial Position)
provide?
, The Balance Sheet provides information about the nature and
amount of the entity's economic resources (those are the assets)
and claims (the liabilities and equity).
The Balance Sheet provides information about quarters within the
year, and the amount of the entity's economic resources (those are
the assets) and claims (the liabilities and equity).
The Balance Sheet provides information about the past and amount of
the entity's economic resources (those are the assets) and claims (the
liabilities and equity).
12. What does the balance sheet represent?
The company's cash flows.
The company's revenue and expenses.
The company's profitability.
The company's financial position at a specific point in time.
13. If a company has total assets of $500,000, liabilities of $200,000, and
cumulative dividends of $50,000, how would you calculate the capital stock
and cumulative net income using the expanded accounting equation?
Capital stock + cumulative net income = $500,000 + $200,000 -
$50,000
Capital stock + cumulative net income = $500,000 - $200,000 +
$50,000
Capital stock + cumulative net income = $200,000 + $50,000 -
$500,000
Capital stock + cumulative net income = $200,000 - $50,000 +
$500,000
14. Which of the following best describes current assets?
Accounting Exam Prep – 163 Verified Questions &
Answers | Latest Update 2026 | Exam Q&A PDF | 100%
Pass Guarantee
1. The focus of managerial accounting is on the needs of ___ _.
the organization's competitors
users inside the organization
governmental agencies
interested parties outside the organization
2. Describe the role of a manager in an investment center and how it differs
from other types of responsibility centers.
A manager in an investment center is responsible for external financial
reporting.
A manager in an investment center only oversees revenue generation
without managing costs.
A manager in an investment center controls costs, revenues, and
investments, unlike other centers that may focus solely on revenues
or costs.
A manager in an investment center focuses on employee
performance rather than financial metrics.
3. What is owner's equity?
What a company owes
None of the choices are correct
What a company owns
, What remains after the liabilities are satisfied
4. What does owner's equity represent in a business?
The owner's share in the business, including the initial investment
and retained earnings.
The expenses incurred by the business.
The total liabilities of the business.
The revenue generated by the business.
5. What does 'cost of goods sold' specifically include?
Total revenue generated from sales
Indirect costs related to marketing and sales
Direct costs attributable to the production of goods sold
Administrative expenses incurred by the company
6. What type of information does a cost accountant primarily prepare?
Financial statements for public reporting
Tax returns for external stakeholders
Investment portfolios for clients
Accounting information for internal decision-making
7. Liabilities are:
saving minus investment.
anything of value one owns.
the debts one owes.
current income minus spending on current needs.
,8. If a company identifies a department as a cost center, what implications does
this have for the manager of that department?
The manager has no control over the expenses of the department.
The manager is responsible for managing and controlling the costs
incurred by that department.
The manager is required to prepare the company's financial
statements.
The manager must focus on increasing revenue generated by the
department.
9. Describe the significance of long term liabilities in financial statements.
Long term liabilities are only important for tax purposes and have no
impact on cash flow.
Long term liabilities are the same as current liabilities and are due
within a year.
Long term liabilities represent a company's future financial
obligations and impact its long-term financial health.
Long term liabilities are irrelevant to financial statements and do not
affect decision-making.
10. How are people who lend money to others compensated?
They pay a commission to the borrower.
They receive a commission on the amount borrowed.
They charge interest to the borrower.
They charge an investment fee to the borrower.
11. What information does the Balance Sheet ( Statement of financial Position)
provide?
, The Balance Sheet provides information about the nature and
amount of the entity's economic resources (those are the assets)
and claims (the liabilities and equity).
The Balance Sheet provides information about quarters within the
year, and the amount of the entity's economic resources (those are
the assets) and claims (the liabilities and equity).
The Balance Sheet provides information about the past and amount of
the entity's economic resources (those are the assets) and claims (the
liabilities and equity).
12. What does the balance sheet represent?
The company's cash flows.
The company's revenue and expenses.
The company's profitability.
The company's financial position at a specific point in time.
13. If a company has total assets of $500,000, liabilities of $200,000, and
cumulative dividends of $50,000, how would you calculate the capital stock
and cumulative net income using the expanded accounting equation?
Capital stock + cumulative net income = $500,000 + $200,000 -
$50,000
Capital stock + cumulative net income = $500,000 - $200,000 +
$50,000
Capital stock + cumulative net income = $200,000 + $50,000 -
$500,000
Capital stock + cumulative net income = $200,000 - $50,000 +
$500,000
14. Which of the following best describes current assets?
