WGU D196 TEST BANK FOR
2024/2025 QUESTIONS AND
CORRECT ANSWERS (100%)
D196 PRACTICE EXAM
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,1. What is the role and purpose of accounting?
Role: To help track income and expenditures and to provide investors, management,
and government with financial information.
Purpose: To accumulate, measure, and communicate financial information about
businesses and other organizations.
2. Who uses accounting information and why?
Potential investors and creditors use accounting information, but basically everyone
uses accounting information. They use it to make internal and external business
decisions.
3. What are the important influences on accounting?
Important influences on accounting include the development of the "generally
accepted accounting principles" (GAAP), international business standards, and ethical
considerations.
4. What is the role of ethics in accounting?
Being an accountant requires honesty and integrity, as well as professional judgment.
Thus, having ethics in accounting is very important.
5. What are the three main functions of accounting?
The 3 main functions of accounting are: Analyzing, Bookkeeping, and Evaluating
(ABE).
6. The Financial Accounting Standards Board (FASB)
An organization responsible for studying accounting issues and establishing standards:
• a) Private group
• b) Public process
• c) Establishes GAAP
7. The Governmental Accounting Standards Board (GASB)
A private, non-governmental organization that sets accounting and financial reporting
standards for state and local governments.
8. Securities and Exchange Commission (SEC)
Regulates stock exchanges.
• a) Has legal authority to regulate financial markets and accounting
• b) Usually defers to the FASB on accounting matters
, 9. The Public Company Accounting Oversight Board (PCAOB)
Oversees all accounting firms.
10. Internal Revenue Service (IRS)
Collects and regulates income taxes.
11. International Accounting Standards Board (IASB)
The FASB of the world (except the USA).
12. Assets
Assets are what we OWN.
Common Assets:
• Cash
• Accounts receivable
• Inventory
• Buildings
• Prepaid expenses
13. Liabilities
An obligation to pay cash, transfer other assets, or provide services to someone.
• A) Liabilities are what we OWE.
• B) Common Liabilities:
o Accounts Payable
o Taxes Payable
o Mortgage Payable
o Unearned Revenue
14. Owners Equity
The owner's share of earnings.
• A) Sources of equity:
o Capital/Common Stock
o Retained Earnings
15. What is the Accounting Cycle and how does it work?
2024/2025 QUESTIONS AND
CORRECT ANSWERS (100%)
D196 PRACTICE EXAM
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
,1. What is the role and purpose of accounting?
Role: To help track income and expenditures and to provide investors, management,
and government with financial information.
Purpose: To accumulate, measure, and communicate financial information about
businesses and other organizations.
2. Who uses accounting information and why?
Potential investors and creditors use accounting information, but basically everyone
uses accounting information. They use it to make internal and external business
decisions.
3. What are the important influences on accounting?
Important influences on accounting include the development of the "generally
accepted accounting principles" (GAAP), international business standards, and ethical
considerations.
4. What is the role of ethics in accounting?
Being an accountant requires honesty and integrity, as well as professional judgment.
Thus, having ethics in accounting is very important.
5. What are the three main functions of accounting?
The 3 main functions of accounting are: Analyzing, Bookkeeping, and Evaluating
(ABE).
6. The Financial Accounting Standards Board (FASB)
An organization responsible for studying accounting issues and establishing standards:
• a) Private group
• b) Public process
• c) Establishes GAAP
7. The Governmental Accounting Standards Board (GASB)
A private, non-governmental organization that sets accounting and financial reporting
standards for state and local governments.
8. Securities and Exchange Commission (SEC)
Regulates stock exchanges.
• a) Has legal authority to regulate financial markets and accounting
• b) Usually defers to the FASB on accounting matters
, 9. The Public Company Accounting Oversight Board (PCAOB)
Oversees all accounting firms.
10. Internal Revenue Service (IRS)
Collects and regulates income taxes.
11. International Accounting Standards Board (IASB)
The FASB of the world (except the USA).
12. Assets
Assets are what we OWN.
Common Assets:
• Cash
• Accounts receivable
• Inventory
• Buildings
• Prepaid expenses
13. Liabilities
An obligation to pay cash, transfer other assets, or provide services to someone.
• A) Liabilities are what we OWE.
• B) Common Liabilities:
o Accounts Payable
o Taxes Payable
o Mortgage Payable
o Unearned Revenue
14. Owners Equity
The owner's share of earnings.
• A) Sources of equity:
o Capital/Common Stock
o Retained Earnings
15. What is the Accounting Cycle and how does it work?
