WGU D775 Intro to Business Accounting
EXAM QUESTIONS AND VERIFIED
CORRECT ANSWERS GRADED A+
LATEST 2026-2027
Income statement - CORRECT ANSWER-Which financial statement reports the profit or loss
using the accrual basis of accounting?
It categorizes revenue based on operating and non-operating activities. - CORRECT ANSWER-
How do the income statement categories allow for different income streams when a company
earns money from multiple sources?
Revenues - CORRECT ANSWER-shopkeeper receives $500 from selling products in their store.
Where should this be reported on the income statement?
Income statement - CORRECT ANSWER-The investors of Kretsmart are interested in whether
Kretsmart has been profitable for the last year. The investors received the complete financial
statements for the company. Which report should they review to see if the company was
profitable?
Revenue - CORRECT ANSWER-A bakery sells $10,000 worth of cakes in one month, but after
subtracting the cost of ingredients, rent, and wages, the business is left with $3,500. Where
should the user of the income statement expect to see the $10,000?
Higher expenses offset the revenue increase. - CORRECT ANSWER-A retailer reports an increase
in revenue but a decrease in income from the previous year. Why can income decrease while
revenue increases?
, It highlights the impact of expenses on overall profitability. - CORRECT ANSWER-A company
reports high revenue but low net income. Which financial insight does the income statement
provide in this scenario?
Multiple step - CORRECT ANSWER-Which type of income statement should report gross margin
in the income statement?
Balance sheet - CORRECT ANSWER-Which financial statement report would a manager use to
determine how much the firm owed its suppliers?
$110,000 - CORRECT ANSWER-A company has the following items:
Equipment: $50,000
Cash: $20,000
Accounts payable: $30,000
Land: $60,000
Accounts receivable: $10,000
Which amount should the user expect to see on the balance sheet in the category of long-term
assets?
Asset - CORRECT ANSWER-A business is finalizing its balance sheet and needs to determine
where to classify cash received from recent sales. Which section of the balance sheet should
include this cash?
Patent - CORRECT ANSWER-Plairtrack has developed a new software program and wants to
protect its exclusive rights to the design and functionality. Which asset classification applies to
this legal protection on the balance sheet?
EXAM QUESTIONS AND VERIFIED
CORRECT ANSWERS GRADED A+
LATEST 2026-2027
Income statement - CORRECT ANSWER-Which financial statement reports the profit or loss
using the accrual basis of accounting?
It categorizes revenue based on operating and non-operating activities. - CORRECT ANSWER-
How do the income statement categories allow for different income streams when a company
earns money from multiple sources?
Revenues - CORRECT ANSWER-shopkeeper receives $500 from selling products in their store.
Where should this be reported on the income statement?
Income statement - CORRECT ANSWER-The investors of Kretsmart are interested in whether
Kretsmart has been profitable for the last year. The investors received the complete financial
statements for the company. Which report should they review to see if the company was
profitable?
Revenue - CORRECT ANSWER-A bakery sells $10,000 worth of cakes in one month, but after
subtracting the cost of ingredients, rent, and wages, the business is left with $3,500. Where
should the user of the income statement expect to see the $10,000?
Higher expenses offset the revenue increase. - CORRECT ANSWER-A retailer reports an increase
in revenue but a decrease in income from the previous year. Why can income decrease while
revenue increases?
, It highlights the impact of expenses on overall profitability. - CORRECT ANSWER-A company
reports high revenue but low net income. Which financial insight does the income statement
provide in this scenario?
Multiple step - CORRECT ANSWER-Which type of income statement should report gross margin
in the income statement?
Balance sheet - CORRECT ANSWER-Which financial statement report would a manager use to
determine how much the firm owed its suppliers?
$110,000 - CORRECT ANSWER-A company has the following items:
Equipment: $50,000
Cash: $20,000
Accounts payable: $30,000
Land: $60,000
Accounts receivable: $10,000
Which amount should the user expect to see on the balance sheet in the category of long-term
assets?
Asset - CORRECT ANSWER-A business is finalizing its balance sheet and needs to determine
where to classify cash received from recent sales. Which section of the balance sheet should
include this cash?
Patent - CORRECT ANSWER-Plairtrack has developed a new software program and wants to
protect its exclusive rights to the design and functionality. Which asset classification applies to
this legal protection on the balance sheet?
