WGU D774 INTRO TO BUSINESS ACCOUNTING
QUESTIONS WITH VERIFIED ACCURATE ANSWERS
Two key responsibilities of external auditors? - Answers - Examining financial
statements for accuracy and compliance & assessing the effectiveness of internal
controls
What do internal auditors do? - Answers - Enhance financial integrity by evaluating
internal controls and proactively identifying weaknesses
What was an effect of the Sarbanes-Oxley Act? - Answers - Strengthened auditor
independence and corporate accountability.
Purpose of the Sarbanes-Oxley Act? - Answers - Improve financial transparency and
reduce corporate fraud.
Simple difference between financial and managerial accounting? - Answers - Financial
accounting focuses on external reporting while managerial accounting focuses on
internal decision-making.
Does managerial accounting need to comply with GAAP? - Answers - No
Celebrities that have an accounting degree - Answers - Janet Jackson, John Grisham,
Simu Liu, & D'Lo Brown
Which organization is responsible for creating and issuing the financial accounting
standards that form the foundation of generally accepted accounting principles (GAAP)
in the United States? - Answers - (FASB) Financial Accounting Standards Board
How often are external financial accounting reports typically published for stakeholders,
such as investors and regulators? - Answers - Quarterly or Annually
Which regulation requires the certification and documentation of internal controls,
including an auditor's issuance of an internal report after evaluating those controls? -
Answers - Sarbanes-Oxley Act
Who was the father of accounting? - Answers - Luca Pacioli
Formula for Net Income - Answers - Revenue - Expenses
Accrual Accounting is a method that... - Answers - Records revenues when earned and
expenses when incurred, regardless of when cash changes hands
, Cash basis accounting is a method that... - Answers - Records revenues WHEN cash is
received and expenses WHEN cash is paid, ignoring WHEN the money was earned or
the service was provided
Purpose of the income statement? - Answers - Report a company's revenues and
expenses over a period of time
5 core components of an income statement - Answers - Revenue, expenses, gains,
losses, and net income.
Income statement is also called? - Answers - Profit & loss statement
What is the statement of owner's equity? - Answers - Shows how the equity (or value) of
the organization has changed over time
Owner's equity formula - Answers - Beginning equity + investments - Distributions =
Ending Equity
3 core components of a balance sheet? - Answers - Assets, liabilities, & Equity
Short-term vs long-term? - Answers - Short term < 1 year , long term > 1 year
Simple term for Asset - Answers - valuable thing (tangible or intangible), resource,
possessions, or advantages
Examples of liabilities - Answers - Amounts owed for goods, taxes due, long-term loans,
mortgages, bonds issued by business
Equity represents what? - Answers - Owner's stake in the business / what is left over
once all debts are paid
Formula for Assets - Answers - Liabilities + Equity
What does the balance sheet show about a business? - Answers - The financial position
at a specific point in time
Accounts receivable & inventory are considered what on a balance sheet? - Answers -
Assets
Statement of cash flows (CFS) - Answers - Tracks all cash inflow and outflow of a
company over a period, revealing liquidity and financial health.
3 core activities detailed on CFS? - Answers - Operating, Investing, & Financing
QUESTIONS WITH VERIFIED ACCURATE ANSWERS
Two key responsibilities of external auditors? - Answers - Examining financial
statements for accuracy and compliance & assessing the effectiveness of internal
controls
What do internal auditors do? - Answers - Enhance financial integrity by evaluating
internal controls and proactively identifying weaknesses
What was an effect of the Sarbanes-Oxley Act? - Answers - Strengthened auditor
independence and corporate accountability.
Purpose of the Sarbanes-Oxley Act? - Answers - Improve financial transparency and
reduce corporate fraud.
Simple difference between financial and managerial accounting? - Answers - Financial
accounting focuses on external reporting while managerial accounting focuses on
internal decision-making.
Does managerial accounting need to comply with GAAP? - Answers - No
Celebrities that have an accounting degree - Answers - Janet Jackson, John Grisham,
Simu Liu, & D'Lo Brown
Which organization is responsible for creating and issuing the financial accounting
standards that form the foundation of generally accepted accounting principles (GAAP)
in the United States? - Answers - (FASB) Financial Accounting Standards Board
How often are external financial accounting reports typically published for stakeholders,
such as investors and regulators? - Answers - Quarterly or Annually
Which regulation requires the certification and documentation of internal controls,
including an auditor's issuance of an internal report after evaluating those controls? -
Answers - Sarbanes-Oxley Act
Who was the father of accounting? - Answers - Luca Pacioli
Formula for Net Income - Answers - Revenue - Expenses
Accrual Accounting is a method that... - Answers - Records revenues when earned and
expenses when incurred, regardless of when cash changes hands
, Cash basis accounting is a method that... - Answers - Records revenues WHEN cash is
received and expenses WHEN cash is paid, ignoring WHEN the money was earned or
the service was provided
Purpose of the income statement? - Answers - Report a company's revenues and
expenses over a period of time
5 core components of an income statement - Answers - Revenue, expenses, gains,
losses, and net income.
Income statement is also called? - Answers - Profit & loss statement
What is the statement of owner's equity? - Answers - Shows how the equity (or value) of
the organization has changed over time
Owner's equity formula - Answers - Beginning equity + investments - Distributions =
Ending Equity
3 core components of a balance sheet? - Answers - Assets, liabilities, & Equity
Short-term vs long-term? - Answers - Short term < 1 year , long term > 1 year
Simple term for Asset - Answers - valuable thing (tangible or intangible), resource,
possessions, or advantages
Examples of liabilities - Answers - Amounts owed for goods, taxes due, long-term loans,
mortgages, bonds issued by business
Equity represents what? - Answers - Owner's stake in the business / what is left over
once all debts are paid
Formula for Assets - Answers - Liabilities + Equity
What does the balance sheet show about a business? - Answers - The financial position
at a specific point in time
Accounts receivable & inventory are considered what on a balance sheet? - Answers -
Assets
Statement of cash flows (CFS) - Answers - Tracks all cash inflow and outflow of a
company over a period, revealing liquidity and financial health.
3 core activities detailed on CFS? - Answers - Operating, Investing, & Financing
