WGU PRINCIPLES OF ACCOUNTING VYC1 | 147
QUESTIONS AND ANSWERS | 2026 UPDATE | WITH
COMPLETE SOLUTION!!
What is an example of recurring income? Answer - bank account interest
Recurring revenue is the portion of a company's revenue that is highly likely to
continue in the future. Recurring revenue is revenue that is predictable, stable
and can be counted on in the future with a high degree of certainty.
What should be considered when deciding on a time period for a budget?
Answer - Amount of financial activity
What is an example of a macro factor in planning a budget? Answer - Interest
rates
Marcus collected this data in his budget for the month of March:
Cash from handyman work $70
Paycheck income $1,500
Rent and bills -$800
Purchase of lawnmower -$150
Total income $1570
,Total Expenses -$950
Which description matches Marcus' March budget? Answer - He ran a surplus
of $620.
Why is financial accounting information valuable to consumers? Answer -
External users can evaluate the financial health of a business.
What information does a balance sheet show? Answer - Financial position of a
business at a specific date
Which organization is focused on developing generally accepted accounting
principles (GAAP) within the United States? Answer - Financial Accounting
Standards Board (FASB)
How would an employee labor union use financial accounting information?
Answer - To determine ability to pay an increase in wages
Which statement is a financial accounting statement? Answer - Income
statement
When considering accounting journal entries and the preparation of financial
statements, debits will increase ____, and decrease_____ Answer - Assets;
Liabilities and Equity
What is a drawback of the United States using International Financial Reporting
Standards (IFRS)? Answer - It would cost U.S. companies time and money in
the short term to adopt.
, What must an accountant record when journalizing a transaction? Answer -
Description of the transaction
Which financial statement is used to ensure that all debits and credits equal?
Answer - Trial balance
Which account balance is entered in the balance sheet columns from the
adjusted trial balance? Answer - Accounts receivable
Which step should an accountant perform next after analyzing source
documents to determine their effects on the basic accounting equation?
Answer - Journalize the transactions
What should be done if the trial balance debit and credit columns are not
equal? Answer - Analyze the trial balance and financial records to find the
error
How is a worksheet used? Answer - To help prepare adjusting entries and
financial statements
Why is the accounting cycle important? Answer - It results in the creation of
the company's financial accounting statements.
Which accounts do closing entries move to retained earnings? Answer -
Expense and revenue
If a company's employees have earned payroll of $250,000 but have not been
paid yet, the following entry is required in the accounting period. Answer -
Debit cash for $250,000 and credit payroll expense for $250,000
QUESTIONS AND ANSWERS | 2026 UPDATE | WITH
COMPLETE SOLUTION!!
What is an example of recurring income? Answer - bank account interest
Recurring revenue is the portion of a company's revenue that is highly likely to
continue in the future. Recurring revenue is revenue that is predictable, stable
and can be counted on in the future with a high degree of certainty.
What should be considered when deciding on a time period for a budget?
Answer - Amount of financial activity
What is an example of a macro factor in planning a budget? Answer - Interest
rates
Marcus collected this data in his budget for the month of March:
Cash from handyman work $70
Paycheck income $1,500
Rent and bills -$800
Purchase of lawnmower -$150
Total income $1570
,Total Expenses -$950
Which description matches Marcus' March budget? Answer - He ran a surplus
of $620.
Why is financial accounting information valuable to consumers? Answer -
External users can evaluate the financial health of a business.
What information does a balance sheet show? Answer - Financial position of a
business at a specific date
Which organization is focused on developing generally accepted accounting
principles (GAAP) within the United States? Answer - Financial Accounting
Standards Board (FASB)
How would an employee labor union use financial accounting information?
Answer - To determine ability to pay an increase in wages
Which statement is a financial accounting statement? Answer - Income
statement
When considering accounting journal entries and the preparation of financial
statements, debits will increase ____, and decrease_____ Answer - Assets;
Liabilities and Equity
What is a drawback of the United States using International Financial Reporting
Standards (IFRS)? Answer - It would cost U.S. companies time and money in
the short term to adopt.
, What must an accountant record when journalizing a transaction? Answer -
Description of the transaction
Which financial statement is used to ensure that all debits and credits equal?
Answer - Trial balance
Which account balance is entered in the balance sheet columns from the
adjusted trial balance? Answer - Accounts receivable
Which step should an accountant perform next after analyzing source
documents to determine their effects on the basic accounting equation?
Answer - Journalize the transactions
What should be done if the trial balance debit and credit columns are not
equal? Answer - Analyze the trial balance and financial records to find the
error
How is a worksheet used? Answer - To help prepare adjusting entries and
financial statements
Why is the accounting cycle important? Answer - It results in the creation of
the company's financial accounting statements.
Which accounts do closing entries move to retained earnings? Answer -
Expense and revenue
If a company's employees have earned payroll of $250,000 but have not been
paid yet, the following entry is required in the accounting period. Answer -
Debit cash for $250,000 and credit payroll expense for $250,000
