2026 WGU D196 PRINCIPLES OF FINANCIAL AND
MANAGERIAL ACCOUNTING FINAL
EXAM|Qs&As|GRADED A+
What is the effect of a company's accounting department maintaining high
ethical standards?
The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information?
Financial statement data are often used in determining the employee bonuses.
Which group establishes financial accounting rules in the US?
Financial Accounting Standards Board (FASB).
A company paid $5000 cash in advertising costs. How does this transaction
affect the paying company's accounting equation?
Assets decrease by $5000; expenses increase by $5000.
,What is a transaction?
Two parties exchanging something of value.
A company borrowed $80,000 cash from a bank. How does this transaction
affect the accounting equation of the borrowing company?
Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples
of?
Liability
Whiat is the purpose of the financial accounting cycle?
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 the other amount?
Assets
What is an expense item?
Cost of goods sold.
How is gross profit computed?
Sales (-) COGS
Which type of account is retained earnings?
Equity
For the purpose of cash flow classification in the statement of cash flows, what
is an operating activity?
Paying employees
How does a classified balance sheet provide useful information to a decision
maker?
MANAGERIAL ACCOUNTING FINAL
EXAM|Qs&As|GRADED A+
What is the effect of a company's accounting department maintaining high
ethical standards?
The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information?
Financial statement data are often used in determining the employee bonuses.
Which group establishes financial accounting rules in the US?
Financial Accounting Standards Board (FASB).
A company paid $5000 cash in advertising costs. How does this transaction
affect the paying company's accounting equation?
Assets decrease by $5000; expenses increase by $5000.
,What is a transaction?
Two parties exchanging something of value.
A company borrowed $80,000 cash from a bank. How does this transaction
affect the accounting equation of the borrowing company?
Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples
of?
Liability
Whiat is the purpose of the financial accounting cycle?
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 the other amount?
Assets
What is an expense item?
Cost of goods sold.
How is gross profit computed?
Sales (-) COGS
Which type of account is retained earnings?
Equity
For the purpose of cash flow classification in the statement of cash flows, what
is an operating activity?
Paying employees
How does a classified balance sheet provide useful information to a decision
maker?
