OA D196 Exam Questions With All Correct Detailed Answers A+ Pass

OA D196 Exam Questions With All Correct Detailed Answers A+ Pass Which report is one of the three primary financial statements? - Answers - Statement of cash flows According to the accounting equation, the amount of liabilities and equity must always be equal to another amount. What is that other amount? - Answers - Assets What is the effect of a company's accounting department maintaining high ethical standards? - Answers - The company's accounting information will increase in value. Why might employees be interested in their company's financial accounting information? - Answers - financial statement data are often used in determining employee bonuses. Which group establishes financial accounting rules in the United States? - Answers - Financial Accounting Standards Board (FASB) A company paid $5,000 cash in advertising costs. How does this transaction affect the paying company's accounting equation? - Answers - Assets decrease by $5,000; owner equity decreases by $5,000. A company borrowed $80,000 cash from a bank. How does this transaction affect the accounting equation of the borrowing company? - Answers - Assets increase by $80,000; liabilities increase by $80,000. What is the impact of expenses on the accounting equation? - Answers - Expenses decrease owners' equity. Which type of account are accounts payable and notes payable both examples of? - Answers - Liability What is the purpose of the financial accounting cycle? - Answers - To turn information about transactions into financial statements Which item is an expense item? - Answers - Cost of goods sold How is gross profit computed? - Answers - Sales minus cost of goods sold Which type of account is retained earnings? - Answers - equity For purposes of cash flow classification in the statement of cash flows, which item is an operating activity? - Answers - Paying Employees How does a classified balance sheet provide useful information to a decision maker? - Answers - It distinguishes between current and long-term assets. What information does a balance sheet provide to a decision maker? - Answers - Summary of the financial position of a company at a particular date What is an account payable? - Answers - The amount owed by a company that purchased goods or services from a supplier on credit What is an example of a financial cost that would result from poor direct labor budgeting and planning? - Answers - Increased hiring, training, and overtime costs