1
WGU D196
WGU D196 | Exam | Pre-Assessment Principles of Financial
& Managerial Accounting| Qs & As| Grade A| 100% Correct
(NEW 2025/ 2026)
What is the impact of expenses on the accounting equation? - ANS ✓Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both examples of? - ANS
✓Liability
What is the purpose of the financial accounting cycle? - ANS ✓To turn information about
transactions into financial statements
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount? - ANS ✓Assets
Which item is an expense item? - ANS ✓Cost of goods sold
WGU D196
, 2
WGU D196
How is gross profit computed? - ANS ✓Sales minus cost of goods sold
Which type of account is retained earnings? - ANS ✓equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity? - ANS ✓Paying employees
How does a classified balance sheet provide useful information to a decision maker? -
ANS ✓It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker? - ANS ✓Summary
of the financial position of a company at a particular date
What is an account payable? - ANS ✓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? - ANS ✓Increased hiring, training, and overtime costs
What does a manager have control over in a cost center? - ANS ✓Costs
WGU D196
WGU D196
WGU D196 | Exam | Pre-Assessment Principles of Financial
& Managerial Accounting| Qs & As| Grade A| 100% Correct
(NEW 2025/ 2026)
What is the impact of expenses on the accounting equation? - ANS ✓Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both examples of? - ANS
✓Liability
What is the purpose of the financial accounting cycle? - ANS ✓To turn information about
transactions into financial statements
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount? - ANS ✓Assets
Which item is an expense item? - ANS ✓Cost of goods sold
WGU D196
, 2
WGU D196
How is gross profit computed? - ANS ✓Sales minus cost of goods sold
Which type of account is retained earnings? - ANS ✓equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity? - ANS ✓Paying employees
How does a classified balance sheet provide useful information to a decision maker? -
ANS ✓It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker? - ANS ✓Summary
of the financial position of a company at a particular date
What is an account payable? - ANS ✓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? - ANS ✓Increased hiring, training, and overtime costs
What does a manager have control over in a cost center? - ANS ✓Costs
WGU D196
