WGU D774 INTRO TO BUSINESS ACCOUNTING
QUESTIONS WITH VERIFIED ACCURATE ANSWERS
In which country was the double-entry accounting system developed in the 15th
century? - Answers - Italy
Which major economic event followed soon after the Stock Market Crash of 1929? -
Answers - Great Depression
Which economic event immediately preceded and led to the passage of the Sarbanes-
Oxley Act of 2002? - Answers - Dot-com bubble
Why are there no standardized regulations relating to the production of managerial
accounting information? - Answers - Company managers can generate any information
they want to help them make better decisions, so no outside regulation is needed.
What is a common use of managerial accounting information? - Answers - Making
better planning, operating, and evaluating decisions inside a company
Which report is one of the three primary financial statements? - Answers - Income
statement
Who performs external audits of financial statements? - Answers - Certified Public
Accountant (CPA)
Who selects a corporation's board of directors? - Answers - Shareholders of the
corporation
What is an advantage of structuring a business as a corporation? - Answers - Legal
existence separated from that of the shareholders
What is one of the characteristics of a corporation? - Answers - Ease of transfer of
ownership
What is contained in Securities and Exchange Commission Form 10-K? - Answers -
Annual audited financial statements
Why would a company's employees be directly interested in the company's income
statement? - Answers - To assess the current profitability of the company, its
performance, and its liquidity
Which information is contained in the reported amount of net income? - Answers - The
amount by which revenues exceed expenses
, Which measurement is highlighted in the multi-step format for the income statement? -
Answers - Operating income
Which label refers to the costs of buying or making the products a company sells? -
Answers - Cost of sales
Which item is listed first on the income statement? - Answers - Revenues
Which item is reported in an income statement? - Answers - Revenues
In which situation does a company report revenue? - Answers - When products or
services are sold
Which item should be reported as revenue in the income statement? - Answers -
Amount earned from customers for the sale of goods
Alliah Company is preparing to do an initial public offering (IPO) of its shares next year.
Alliah knows that investors use a company's net income in their valuation models to
determine how much an IPO company's shares are worth. Alliah's founders are eager
for this IPO to do well so that their many years of work will be validated in the stock
market. Here are some data from Alliah Company's financial statements:Inventory
Accounts Payable
Expenses
Capital Stock (also called Paid-in Capital)
Accounts Receivable
Cash
Retained Earnings
Revenue
Building
Loans Payable
Which items are used to compute Alliah's net income? - Answers - Revenue and
expenses
The financial records for Freedom Rock Bicycles contain the following accounts.
Salary expense
Cash
Sales
Inventory
Income tax expense
Accounts receivable
Which items should be used to compute Freedom Rock's net income? - Answers -
Sales, salary expense, and income tax expense
The amount of a company's assets and the amount of the company's liabilities are
known. Which computation should be performed to determine the company's owners'
QUESTIONS WITH VERIFIED ACCURATE ANSWERS
In which country was the double-entry accounting system developed in the 15th
century? - Answers - Italy
Which major economic event followed soon after the Stock Market Crash of 1929? -
Answers - Great Depression
Which economic event immediately preceded and led to the passage of the Sarbanes-
Oxley Act of 2002? - Answers - Dot-com bubble
Why are there no standardized regulations relating to the production of managerial
accounting information? - Answers - Company managers can generate any information
they want to help them make better decisions, so no outside regulation is needed.
What is a common use of managerial accounting information? - Answers - Making
better planning, operating, and evaluating decisions inside a company
Which report is one of the three primary financial statements? - Answers - Income
statement
Who performs external audits of financial statements? - Answers - Certified Public
Accountant (CPA)
Who selects a corporation's board of directors? - Answers - Shareholders of the
corporation
What is an advantage of structuring a business as a corporation? - Answers - Legal
existence separated from that of the shareholders
What is one of the characteristics of a corporation? - Answers - Ease of transfer of
ownership
What is contained in Securities and Exchange Commission Form 10-K? - Answers -
Annual audited financial statements
Why would a company's employees be directly interested in the company's income
statement? - Answers - To assess the current profitability of the company, its
performance, and its liquidity
Which information is contained in the reported amount of net income? - Answers - The
amount by which revenues exceed expenses
, Which measurement is highlighted in the multi-step format for the income statement? -
Answers - Operating income
Which label refers to the costs of buying or making the products a company sells? -
Answers - Cost of sales
Which item is listed first on the income statement? - Answers - Revenues
Which item is reported in an income statement? - Answers - Revenues
In which situation does a company report revenue? - Answers - When products or
services are sold
Which item should be reported as revenue in the income statement? - Answers -
Amount earned from customers for the sale of goods
Alliah Company is preparing to do an initial public offering (IPO) of its shares next year.
Alliah knows that investors use a company's net income in their valuation models to
determine how much an IPO company's shares are worth. Alliah's founders are eager
for this IPO to do well so that their many years of work will be validated in the stock
market. Here are some data from Alliah Company's financial statements:Inventory
Accounts Payable
Expenses
Capital Stock (also called Paid-in Capital)
Accounts Receivable
Cash
Retained Earnings
Revenue
Building
Loans Payable
Which items are used to compute Alliah's net income? - Answers - Revenue and
expenses
The financial records for Freedom Rock Bicycles contain the following accounts.
Salary expense
Cash
Sales
Inventory
Income tax expense
Accounts receivable
Which items should be used to compute Freedom Rock's net income? - Answers -
Sales, salary expense, and income tax expense
The amount of a company's assets and the amount of the company's liabilities are
known. Which computation should be performed to determine the company's owners'
