WGU D774 INTRO TO BUSINESS ACCOUNTING EXAM
QUESTIONS AND ANSWERS
1. In which country was the double-entry accounting system
developed in the 15th century?: Italy
2. Which major economic event followed soon after the Stock Market
Crash of 1929?: Great Depression
3. Which economic event immediately preceded and led to the
passage of the Sarbanes-Oxley Act of 2002?: Dot-com bubble
4. Why are there no standardized regulations relating to the production
of managerial accounting information?: Company managers can generate any
information they want to help them make better decisions, so no outside regulation is
needed.
5. What is a common use of managerial accounting information?:
Making better planning, operating, and evaluating decisions inside a company
6. Which report is one of the three primary financial statements?:
Income statement
7. Who performs external audits of financial statements?: Certified Public
Accountant (CPA)
8. Who selects a corporation's board of directors?: Shareholders of the
corporation
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, 9. What is an advantage of structuring a business as a corporation?: Legal
existence separated from that of the shareholders
10. What is one of the characteristics of a corporation?: Ease of transfer of
ownership
11. What is contained in Securities and Exchange Commission Form 10-
K?: Annual audited financial statements
12. Why would a company's employees be directly interested in the
company's income statement?: To assess the current profitability of the company,
its performance, and its liquidity
13. Which information is contained in the reported amount of net
income?: The amount by which revenues exceed expenses
14. Which measurement is highlighted in the multi-step format for the
income statement?: Operating income
15. Which label refers to the costs of buying or making the products a
company sells?: Cost of sales
16. Which item is listed first on the income statement?: Revenues
17. Which item is reported in an income statement?: Revenues
18. In which situation does a company report revenue?: When products or
services are sold
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QUESTIONS AND ANSWERS
1. In which country was the double-entry accounting system
developed in the 15th century?: Italy
2. Which major economic event followed soon after the Stock Market
Crash of 1929?: Great Depression
3. Which economic event immediately preceded and led to the
passage of the Sarbanes-Oxley Act of 2002?: Dot-com bubble
4. Why are there no standardized regulations relating to the production
of managerial accounting information?: Company managers can generate any
information they want to help them make better decisions, so no outside regulation is
needed.
5. What is a common use of managerial accounting information?:
Making better planning, operating, and evaluating decisions inside a company
6. Which report is one of the three primary financial statements?:
Income statement
7. Who performs external audits of financial statements?: Certified Public
Accountant (CPA)
8. Who selects a corporation's board of directors?: Shareholders of the
corporation
1/
13
, 9. What is an advantage of structuring a business as a corporation?: Legal
existence separated from that of the shareholders
10. What is one of the characteristics of a corporation?: Ease of transfer of
ownership
11. What is contained in Securities and Exchange Commission Form 10-
K?: Annual audited financial statements
12. Why would a company's employees be directly interested in the
company's income statement?: To assess the current profitability of the company,
its performance, and its liquidity
13. Which information is contained in the reported amount of net
income?: The amount by which revenues exceed expenses
14. Which measurement is highlighted in the multi-step format for the
income statement?: Operating income
15. Which label refers to the costs of buying or making the products a
company sells?: Cost of sales
16. Which item is listed first on the income statement?: Revenues
17. Which item is reported in an income statement?: Revenues
18. In which situation does a company report revenue?: When products or
services are sold
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