WGU D102 Financial Accounting EXAM
WITH ANSWERS
What is a balance sheet?
Report of the total of the balances of all of a company's bank accounts
Report of the assets, liabilities, and equity of a company as of a point in time
Report of the revenues and expenses of a company during a period
Report of the operating, investing, and financing cash flows of a company during a
period - CORRECT ANSWERS-Report of the assets, liabilities, and equity of a
company as of a point in time
Which item is a liability?
Accounts payable
Retained earnings
Accounts receivable
Capital stock - CORRECT ANSWERS-Accounts payable
Which item is an owners' equity item?
Accounts payable
Accounts receivable
Retained earnings
Inventory - CORRECT ANSWERS-Retained earnings
Strime Company's assets equal $104,000, and its stockholders' equity totals $68,500.
What is the amount of its liabilities?
$35,500
,$172,500
$68,500
$104,000 - CORRECT ANSWERS-$35,500
The Whole Pine Company's liabilities equal $124,000, and its stockholders' equity totals
$68,500. What is the amount of its assets?
$55,500
$124,000
$68,500
$192,500 - CORRECT ANSWERS-$192,500
Which is the proper description of the accounting equation?
Owners' Equity = Assets
Assets = Liabilities + Owners' Equity
Assets = Liabilities
Owners' Equity = Liabilities - CORRECT ANSWERS-Assets = Liabilities + Owners'
Equity
After the effects of every transaction are considered and recorded, what must the
accounting equation do?
Equal itself, or balance
Equal total owners' equity
Equal total liabilities
Equal total assets - CORRECT ANSWERS-Equal itself, or balance
Which statement best describes the main features of inventories?
Goods due from customers who have purchased on account
Goods purchased and held for sale
Goods used by a company on a long-term basis, usually more than five years
Goods used by company employees on a daily basis - CORRECT ANSWERS-Goods
purchased and held for sale
What is a classified balance sheet?
A balance sheet that is not publicly disclosed
A balance sheet that distinguishes between current and long-term assets
A balance sheet that is for a period of time rather than as of a point in time
A balance sheet that separates liabilities from equities - CORRECT ANSWERS-A
balance sheet that distinguishes between current and long-term assets
What does owners' equity represent?
,The difference between total assets and total liabilities
The difference between current assets and long-term assets
The difference between total liabilities and total owners' equity
The difference between current liabilities and long-term liabilities - CORRECT
ANSWERS-The difference between total assets and total liabilities
For most companies, when assets or liabilities are classified as "current" on the balance
sheet, it generally means the related assets or liabilities will be turned into cash or will
be required to be paid, respectively, within what time frame?
The next quarter
The next six months
The next month
The next year - CORRECT ANSWERS-The next year
What is owners' equity?
An economic resource that is owned or controlled by a company
An obligation to pay cash, transfer other assets, or provide services to someone else
A residual amount representing the net assets available after all obligations have been
satisfied
The sum of operating, investing, and financing cash flows - CORRECT ANSWERS-A
residual amount representing the net assets available after all obligations have been
satisfied
Which item is an asset?
Accounts receivable
Capital stock
Retained earnings
Accounts payable - CORRECT ANSWERS-Accounts receivable
According to the accounting equation, what is the correct computation of owners'
equity?
Total Assets + Liabilities
Total Assets - Liabilities
Cash + Bank Loan Balance
Cash - Bank Loan Balance - CORRECT ANSWERS-Total Assets - Liabilities
What is an accurate description of accounts payable?
Obligation arising from the purchase of inventory on account
Obligation arising from the sale of office supplies on account
Obligation arising from the payment of income taxes on account
, Obligation arising from the sale of equipment on account - CORRECT ANSWERS-
Obligation arising from the purchase of inventory on account
Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
Inventory
Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets?
Cash, retained earnings, and capital stock
Cash, buildings, and land
Cash, accounts receivable, and inventory
Cash, inventory, and capital stock - CORRECT ANSWERS-Cash, accounts receivable,
and inventory
What is bad debt expense?
Amount of uncollectible accounts created by credit sales during the year
Amount of inventory lost, stolen, or sold during the year
Amount of gross profit divided by sales for the year
Amount of wear and tear on long-lived assets during the year - CORRECT ANSWERS-
Amount of uncollectible accounts created by credit sales during the year
Which item is an expense item?
Cost of Goods Sold
Sales
Cash
Accounts Payable - CORRECT ANSWERS-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 - CORRECT ANSWERS-
Groups and total revenues/groups and total expenses
WITH ANSWERS
What is a balance sheet?
Report of the total of the balances of all of a company's bank accounts
Report of the assets, liabilities, and equity of a company as of a point in time
Report of the revenues and expenses of a company during a period
Report of the operating, investing, and financing cash flows of a company during a
period - CORRECT ANSWERS-Report of the assets, liabilities, and equity of a
company as of a point in time
Which item is a liability?
Accounts payable
Retained earnings
Accounts receivable
Capital stock - CORRECT ANSWERS-Accounts payable
Which item is an owners' equity item?
Accounts payable
Accounts receivable
Retained earnings
Inventory - CORRECT ANSWERS-Retained earnings
Strime Company's assets equal $104,000, and its stockholders' equity totals $68,500.
What is the amount of its liabilities?
$35,500
,$172,500
$68,500
$104,000 - CORRECT ANSWERS-$35,500
The Whole Pine Company's liabilities equal $124,000, and its stockholders' equity totals
$68,500. What is the amount of its assets?
$55,500
$124,000
$68,500
$192,500 - CORRECT ANSWERS-$192,500
Which is the proper description of the accounting equation?
Owners' Equity = Assets
Assets = Liabilities + Owners' Equity
Assets = Liabilities
Owners' Equity = Liabilities - CORRECT ANSWERS-Assets = Liabilities + Owners'
Equity
After the effects of every transaction are considered and recorded, what must the
accounting equation do?
Equal itself, or balance
Equal total owners' equity
Equal total liabilities
Equal total assets - CORRECT ANSWERS-Equal itself, or balance
Which statement best describes the main features of inventories?
Goods due from customers who have purchased on account
Goods purchased and held for sale
Goods used by a company on a long-term basis, usually more than five years
Goods used by company employees on a daily basis - CORRECT ANSWERS-Goods
purchased and held for sale
What is a classified balance sheet?
A balance sheet that is not publicly disclosed
A balance sheet that distinguishes between current and long-term assets
A balance sheet that is for a period of time rather than as of a point in time
A balance sheet that separates liabilities from equities - CORRECT ANSWERS-A
balance sheet that distinguishes between current and long-term assets
What does owners' equity represent?
,The difference between total assets and total liabilities
The difference between current assets and long-term assets
The difference between total liabilities and total owners' equity
The difference between current liabilities and long-term liabilities - CORRECT
ANSWERS-The difference between total assets and total liabilities
For most companies, when assets or liabilities are classified as "current" on the balance
sheet, it generally means the related assets or liabilities will be turned into cash or will
be required to be paid, respectively, within what time frame?
The next quarter
The next six months
The next month
The next year - CORRECT ANSWERS-The next year
What is owners' equity?
An economic resource that is owned or controlled by a company
An obligation to pay cash, transfer other assets, or provide services to someone else
A residual amount representing the net assets available after all obligations have been
satisfied
The sum of operating, investing, and financing cash flows - CORRECT ANSWERS-A
residual amount representing the net assets available after all obligations have been
satisfied
Which item is an asset?
Accounts receivable
Capital stock
Retained earnings
Accounts payable - CORRECT ANSWERS-Accounts receivable
According to the accounting equation, what is the correct computation of owners'
equity?
Total Assets + Liabilities
Total Assets - Liabilities
Cash + Bank Loan Balance
Cash - Bank Loan Balance - CORRECT ANSWERS-Total Assets - Liabilities
What is an accurate description of accounts payable?
Obligation arising from the purchase of inventory on account
Obligation arising from the sale of office supplies on account
Obligation arising from the payment of income taxes on account
, Obligation arising from the sale of equipment on account - CORRECT ANSWERS-
Obligation arising from the purchase of inventory on account
Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
Inventory
Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets?
Cash, retained earnings, and capital stock
Cash, buildings, and land
Cash, accounts receivable, and inventory
Cash, inventory, and capital stock - CORRECT ANSWERS-Cash, accounts receivable,
and inventory
What is bad debt expense?
Amount of uncollectible accounts created by credit sales during the year
Amount of inventory lost, stolen, or sold during the year
Amount of gross profit divided by sales for the year
Amount of wear and tear on long-lived assets during the year - CORRECT ANSWERS-
Amount of uncollectible accounts created by credit sales during the year
Which item is an expense item?
Cost of Goods Sold
Sales
Cash
Accounts Payable - CORRECT ANSWERS-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 - CORRECT ANSWERS-
Groups and total revenues/groups and total expenses
