WGU D102 FINANCIAL ACCOUNTING OA
STUDY GUIDE WITH SOLVED QUESTIONS AND
ANSWERS
◉ Which item is an expense item?
Cost of Goods Sold
Sales
Cash
Accounts Payable.
Answer: Cost of Goods Sold
◉ What is a single-step income statement?
Emphasizes separate computation of gross profit and operating
income
Groups and total revenues/groups and total expenses
Omits both interest expense and income tax expense
Includes all other expenses, but omits income tax expense.
Answer: Groups and total revenues/groups and total expenses
,◉ What is "gross profit"?
Sales − Cost of Goods Sold.
Accounts Receivable − Accounts Payable
Total Assets − Total Liabilities
Total Revenues − Total Expenses.
Answer: Sales − Cost of Goods Sold.
◉ What is a company's gross profit percentage?
Net Income ÷ Owners' Equity
Gross Profit ÷ Sales
Net Income ÷ Sales
Gross Profit ÷ Net Income.
Answer: Gross Profit ÷ Sales
◉ Which item is a revenue item?
Accounts Receivable
Cash
Loan Payable
Sales.
,Answer: Sales
◉ What is an income statement?
Report of the assets, liabilities, and equity of a company as of a point
in time
Report of the operating, investing, and financing cash flows of a
company during a period
Report of the revenues and expenses of a company during a period
Report of the total of the balances of all of a company's bank
accounts.
Answer: Report of the revenues and expenses of a company during a
period
Report of the total of the balances of all of a company's bank
accounts
◉ What is an example of an expense that fits under the heading
"selling, general, and administrative expense"?
Wages of company headquarters accounting staff
Fees earned by providing services
Purchase cost of inventory items bought from suppliers
Cost paid for the use of someone else's money.
, Answer: Wages of company headquarters accounting staff
◉ What is depreciation expense?
The amount of uncollectible accounts created by credit sales during
the year
The amount of inventory lost, stolen, or sold during the year
The amount of gross profit divided by sales for the year
The amount of wear and tear on long-lived assets during the year.
Answer: The amount of wear and tear on long-lived assets during
the year
◉ Which are components of an income statement?
Current and noncurrent assets
Retained earnings and dividends
Short-term and accrued liabilities
Revenue and expenses.
Answer: Revenue and expenses
◉ What is net income?
STUDY GUIDE WITH SOLVED QUESTIONS AND
ANSWERS
◉ Which item is an expense item?
Cost of Goods Sold
Sales
Cash
Accounts Payable.
Answer: Cost of Goods Sold
◉ What is a single-step income statement?
Emphasizes separate computation of gross profit and operating
income
Groups and total revenues/groups and total expenses
Omits both interest expense and income tax expense
Includes all other expenses, but omits income tax expense.
Answer: Groups and total revenues/groups and total expenses
,◉ What is "gross profit"?
Sales − Cost of Goods Sold.
Accounts Receivable − Accounts Payable
Total Assets − Total Liabilities
Total Revenues − Total Expenses.
Answer: Sales − Cost of Goods Sold.
◉ What is a company's gross profit percentage?
Net Income ÷ Owners' Equity
Gross Profit ÷ Sales
Net Income ÷ Sales
Gross Profit ÷ Net Income.
Answer: Gross Profit ÷ Sales
◉ Which item is a revenue item?
Accounts Receivable
Cash
Loan Payable
Sales.
,Answer: Sales
◉ What is an income statement?
Report of the assets, liabilities, and equity of a company as of a point
in time
Report of the operating, investing, and financing cash flows of a
company during a period
Report of the revenues and expenses of a company during a period
Report of the total of the balances of all of a company's bank
accounts.
Answer: Report of the revenues and expenses of a company during a
period
Report of the total of the balances of all of a company's bank
accounts
◉ What is an example of an expense that fits under the heading
"selling, general, and administrative expense"?
Wages of company headquarters accounting staff
Fees earned by providing services
Purchase cost of inventory items bought from suppliers
Cost paid for the use of someone else's money.
, Answer: Wages of company headquarters accounting staff
◉ What is depreciation expense?
The amount of uncollectible accounts created by credit sales during
the year
The amount of inventory lost, stolen, or sold during the year
The amount of gross profit divided by sales for the year
The amount of wear and tear on long-lived assets during the year.
Answer: The amount of wear and tear on long-lived assets during
the year
◉ Which are components of an income statement?
Current and noncurrent assets
Retained earnings and dividends
Short-term and accrued liabilities
Revenue and expenses.
Answer: Revenue and expenses
◉ What is net income?
