WGU D101 Cost and Managerial Accounting | OA |
Objective Assessment 128 Actual Exam Questions
with Verified Answers & Detailed Rationales
Complete A+ Guide | 100% Guaranteed Pass |
2026/2027 Update
,Question 1
Which of the following best describes the primary purpose of managerial
accounting?
A) To provide information to external stakeholders such as investors and
creditors
B) To provide information to internal managers for planning, controlling, and
decision-making
C) To prepare financial statements in accordance with GAAP
D) To ensure compliance with tax regulations
Answer: B) To provide information to internal managers for planning,
controlling, and decision-making
Rationale: Managerial accounting focuses on providing information to
internal users (managers) for planning, controlling, and decision-making.
Financial accounting (A and C) provides information to external stakeholders
and follows GAAP. Tax accounting (D) focuses on tax compliance.
Question 2
Which of the following is NOT a characteristic of managerial accounting?
A) Focuses on future-oriented information
B) Emphasizes relevance and timeliness
C) Must follow Generally Accepted Accounting Principles (GAAP)
D) Provides detailed information for specific segments of the organization
Answer: C) Must follow Generally Accepted Accounting Principles
(GAAP)
Rationale: Managerial accounting does NOT have to follow GAAP. It
emphasizes relevance, timeliness, and future orientation (A, B) to support
internal decision-making. Financial accounting (C) must follow GAAP.
,Question 3
What are the three major activities of managerial accounting?
A) Planning, Controlling, and Decision-Making
B) Recording, Classifying, and Summarizing
C) Analyzing, Interpreting, and Reporting
D) Budgeting, Forecasting, and Auditing
Answer: A) Planning, Controlling, and Decision-Making
Rationale: The three major activities of managerial accounting are planning
(setting goals and strategies), controlling (monitoring and evaluating
performance), and decision-making (choosing among alternatives). Options B
and C describe financial accounting activities.
Question 4
What is the difference between a cost and an expense?
A) Costs are always expensed immediately
B) A cost is a sacrifice of resources, while an expense is a cost that has been
used up in generating revenue
C) Costs and expenses are the same thing
D) Expenses are always direct costs
Answer: B) A cost is a sacrifice of resources, while an expense is a cost
that has been used up in generating revenue
Rationale: A cost is a sacrifice of resources (a payment or obligation). An
expense is a cost that has been consumed or used up in the process of
generating revenue. Not all costs are immediately expensed; some become
assets (inventory, equipment).
Question 5
Which of the following is a period cost?
, A) Direct materials used in production
B) Direct labor wages
C) Selling and administrative expenses
D) Factory overhead
Answer: C) Selling and administrative expenses
Rationale: Period costs are non-manufacturing costs that are expensed in the
period incurred. Selling and administrative expenses are period costs. Direct
materials (A), direct labor (B), and factory overhead (D) are product costs.
Question 6
Which of the following is a product cost?
A) Sales commissions
B) Administrative salaries
C) Factory rent
D) Advertising expenses
Answer: C) Factory rent
Rationale: Product costs are costs associated with manufacturing a product
and include direct materials, direct labor, and manufacturing overhead.
Factory rent is a manufacturing overhead cost and is a product cost. Sales
commissions (A), administrative salaries (B), and advertising expenses (D)
are period costs.
Question 7
What is the formula for Cost of Goods Sold (COGS)?
A) Beginning Inventory + Purchases - Ending Inventory
B) Beginning Inventory + Cost of Goods Manufactured - Ending Inventory
C) Ending Inventory + Purchases - Beginning Inventory
D) Direct Materials + Direct Labor + Overhead
Objective Assessment 128 Actual Exam Questions
with Verified Answers & Detailed Rationales
Complete A+ Guide | 100% Guaranteed Pass |
2026/2027 Update
,Question 1
Which of the following best describes the primary purpose of managerial
accounting?
A) To provide information to external stakeholders such as investors and
creditors
B) To provide information to internal managers for planning, controlling, and
decision-making
C) To prepare financial statements in accordance with GAAP
D) To ensure compliance with tax regulations
Answer: B) To provide information to internal managers for planning,
controlling, and decision-making
Rationale: Managerial accounting focuses on providing information to
internal users (managers) for planning, controlling, and decision-making.
Financial accounting (A and C) provides information to external stakeholders
and follows GAAP. Tax accounting (D) focuses on tax compliance.
Question 2
Which of the following is NOT a characteristic of managerial accounting?
A) Focuses on future-oriented information
B) Emphasizes relevance and timeliness
C) Must follow Generally Accepted Accounting Principles (GAAP)
D) Provides detailed information for specific segments of the organization
Answer: C) Must follow Generally Accepted Accounting Principles
(GAAP)
Rationale: Managerial accounting does NOT have to follow GAAP. It
emphasizes relevance, timeliness, and future orientation (A, B) to support
internal decision-making. Financial accounting (C) must follow GAAP.
,Question 3
What are the three major activities of managerial accounting?
A) Planning, Controlling, and Decision-Making
B) Recording, Classifying, and Summarizing
C) Analyzing, Interpreting, and Reporting
D) Budgeting, Forecasting, and Auditing
Answer: A) Planning, Controlling, and Decision-Making
Rationale: The three major activities of managerial accounting are planning
(setting goals and strategies), controlling (monitoring and evaluating
performance), and decision-making (choosing among alternatives). Options B
and C describe financial accounting activities.
Question 4
What is the difference between a cost and an expense?
A) Costs are always expensed immediately
B) A cost is a sacrifice of resources, while an expense is a cost that has been
used up in generating revenue
C) Costs and expenses are the same thing
D) Expenses are always direct costs
Answer: B) A cost is a sacrifice of resources, while an expense is a cost
that has been used up in generating revenue
Rationale: A cost is a sacrifice of resources (a payment or obligation). An
expense is a cost that has been consumed or used up in the process of
generating revenue. Not all costs are immediately expensed; some become
assets (inventory, equipment).
Question 5
Which of the following is a period cost?
, A) Direct materials used in production
B) Direct labor wages
C) Selling and administrative expenses
D) Factory overhead
Answer: C) Selling and administrative expenses
Rationale: Period costs are non-manufacturing costs that are expensed in the
period incurred. Selling and administrative expenses are period costs. Direct
materials (A), direct labor (B), and factory overhead (D) are product costs.
Question 6
Which of the following is a product cost?
A) Sales commissions
B) Administrative salaries
C) Factory rent
D) Advertising expenses
Answer: C) Factory rent
Rationale: Product costs are costs associated with manufacturing a product
and include direct materials, direct labor, and manufacturing overhead.
Factory rent is a manufacturing overhead cost and is a product cost. Sales
commissions (A), administrative salaries (B), and advertising expenses (D)
are period costs.
Question 7
What is the formula for Cost of Goods Sold (COGS)?
A) Beginning Inventory + Purchases - Ending Inventory
B) Beginning Inventory + Cost of Goods Manufactured - Ending Inventory
C) Ending Inventory + Purchases - Beginning Inventory
D) Direct Materials + Direct Labor + Overhead
