WGU D774 Intro to Business Accounting | OA | Objective Assessment | 2026 Update | 100% Correct|| Questions and Well Detailed Answers Plus Rationales

WGU D774 Intro to Business Accounting
| OA | Objective Assessment | 2026 Update | 100%
Correct|| Questions and Well Detailed Answers
Plus Rationales


1. What is the primary purpose of accounting?
t t t t t t




A. To calculate taxes
t t




B. To record financial transactions
t t t




C. To provide financial information for decision-making
t t t t t




D. To track employee performance
t t t




Answer: C t




Rationale: Accounting’s main purpose is to provide useful financial information to
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internal and external users for decision-making.
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2. Which of the following is an internal user of accounting information?
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A. Investor
B. Creditor
C. Manager
D. Government agency t




Answer: C t




Rationale: Managers use accounting information internally to plan, control, and evaluate
t t t t t t t t t t




business operations.
t t




3. Financial accounting focuses primarily on:t t t t




A. Future projections t




B. Internal decision-making t




C. External reporting t




D. Budget preparation t




Answer: C t




Rationale: Financial accounting prepares reports for external users such as investors and
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creditors.
t

,4. Managerial accounting differs from financial accounting because it:
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A. Follows GAAP t




B. Is required by law
t t t




C. Focuses on internal users t t t




D. Produces audited statements t t




Answer: C t




Rationale: Managerial accounting is used internally and is not bound by GAAP.
t t t t t t t t t t t




Accounting Principles & Assumptions t t t




5. The business entity assumption means:
t t t t




A. The business is separate from its owner
t t t t t t




B. The business will last forever
t t t t




C. All transactions are recorded at market value
t t t t t t




D. Only cash transactions are recorded
t t t t




Answer: A t




Rationale: Business finances must be kept separate from personal finances.
t t t t t t t t t




6. Which principle states that accounting records assume the business will
t t t t t t t t t




continue operating?
t t




A. Cost principle t




B. Revenue recognition principle t t




C. Going concern assumption t t




D. Matching principle t




Answer: C t




Rationale: The going concern assumption assumes the business will remain operational
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into the foreseeable future.
t t t t




7. Under the cost principle, assets are recorded at:
t t t t t t t




A. Market value t




B. Replacement cost t




C. Historical cost t




D. Selling price t

,Answer: C
t




Rationale: Assets are recorded at their original purchase price.
t t t t t t t t

, 8. The revenue recognition principle requires revenue to be recorded when:
t t t t t t t t t




A. Cash is received t t




B. Expenses are paid t t




C. Revenue is earned t t




D. The customer places an order
t t t t




Answer: C t




Rationale: Revenue is recorded when it is earned, regardless of cash flow.
t t t t t t t t t t t




9. The matching principle requires that:
t t t t




A. Assets equal liabilities t t




B. Expenses be matched with revenues t t t t




C. Cash equals profit t t




D. Revenue be recorded first t t t




Answer: B t




Rationale: Expenses should be recorded in the same period as the revenues they help
t t t t t t t t t t t t t




generate.
t




The Accounting Equation
t t




10. The basic accounting equation is:
t t t t



A. Assets = Revenue − Expenses t t t t



B. Assets = Liabilities + Equity t t t t




C. Assets + Liabilities = Equity t t t t




D. Revenue = Expenses t t




Answer: B t




Rationale: This equation is the foundation of all accounting systems.
t t t t t t t t t




11. If total assets are $100,000 and total liabilities are $40,000, equity equals:
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A. $60,000
B. $140,000
C. $40,000
D. $100,000