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WGU D196 TEST BANK FOR OA AND PREASSESSMENT
REVIEW 2026/2027 WITH 250 ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS (100% CORRECT
ANSWERS) D196 PRACTICE EXAM 2026 (BRAND NEW!!)
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting
equation?
Assets decrease by $5,000; expenses increase by $5,000.
Assets increase by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; revenues increase by $5,000.
Assets decrease by $5,000; liabilities increase by $5,000.
......ANSWER......Assets decrease by $5,000; expenses increase by
$5,000.
What is a transaction?
A type of commonly used accounting software
A category of merchandiser or retailer
Two parties exchanging something of value
An example of an online business document ......ANSWER......Two
parties exchanging something of value
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A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the
borrowing company?
Assets increase by $80,000; owners' equity increases by $80,000.
Assets increase by $80,000; liabilities decrease by $80,000.
Assets increase by $80,000; liabilities increase by $80,000.
Assets increase by $80,000; revenues increase by $80,000.
......ANSWER......Assets increase by $80,000; liabilities increase by
$80,000.
What is the impact of expenses on the accounting equation?
Expenses increase owners' equity.
Expenses decrease liabilities.
Expenses decrease owners' equity.
Expenses increase liabilities. ......ANSWER......Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both
examples of?
Liability
Asset
Expense
Equity ......ANSWER......Liability
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What is the purpose of the financial accounting cycle?
To collect confidential information for management to use as a
competitive tool
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
......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?
Cash
The sum of revenues and expenses
Assets
The sum of expenses and dividends ......ANSWER......Assets
Which item is an expense item?
Cost of goods sold
Loans payable
Accounts receivable
WGU D196 TEST BANK FOR OA AND PREASSESSMENT
REVIEW 2026/2027 WITH 250 ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS (100% CORRECT
ANSWERS) D196 PRACTICE EXAM 2026 (BRAND NEW!!)
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting
equation?
Assets decrease by $5,000; expenses increase by $5,000.
Assets increase by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; revenues increase by $5,000.
Assets decrease by $5,000; liabilities increase by $5,000.
......ANSWER......Assets decrease by $5,000; expenses increase by
$5,000.
What is a transaction?
A type of commonly used accounting software
A category of merchandiser or retailer
Two parties exchanging something of value
An example of an online business document ......ANSWER......Two
parties exchanging something of value
,2|Page
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the
borrowing company?
Assets increase by $80,000; owners' equity increases by $80,000.
Assets increase by $80,000; liabilities decrease by $80,000.
Assets increase by $80,000; liabilities increase by $80,000.
Assets increase by $80,000; revenues increase by $80,000.
......ANSWER......Assets increase by $80,000; liabilities increase by
$80,000.
What is the impact of expenses on the accounting equation?
Expenses increase owners' equity.
Expenses decrease liabilities.
Expenses decrease owners' equity.
Expenses increase liabilities. ......ANSWER......Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both
examples of?
Liability
Asset
Expense
Equity ......ANSWER......Liability
, 3|Page
What is the purpose of the financial accounting cycle?
To collect confidential information for management to use as a
competitive tool
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
......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?
Cash
The sum of revenues and expenses
Assets
The sum of expenses and dividends ......ANSWER......Assets
Which item is an expense item?
Cost of goods sold
Loans payable
Accounts receivable
