WGU D196 PRE-ASSESSMENT PRINCIPLES OF FINANCIAL AND
MANAGERIAL ACCOUNTING QUESTIONS AND CORRECT
ANSWERS WITH RATIONALES NEW 2026-2027 UPDATE
50 QUESTIONS
TABLE OF CONTENTS
# TOPIC
1 Analyze and record business transactions using the double-entry system and accrual accounting
principles
2 Prepare and interpret financial statements in accordance with U
3 Apply cost behavior concepts, cost-volume-profit analysis, and relevant costing to managerial decisions
4 Evaluate internal control systems and ethical financial reporting under SOX and professional standards
5 Construct and critique operating and capital budgets, including variance analysis and performance
evaluation
6 WGU D196 Pre
7 Assessment Principles of Financial and Managerial Accounting Questions and Correct Answers with
Rationales New 2026
8 2027 Update
9 Foundations of Financial and Managerial Accounting
10 Applied Financial and Managerial Accounting
11 Advanced Financial and Managerial Accounting
12 Financial and Managerial Accounting Review
ABSTRACT
Page 1
,This study document brings together 50 carefully worded exam questions drawn from WGU D196
Pre-Assessment Principles of Financial and Managerial Accounting Questions and Correct
Answers with Rationales New 2026-2027 Update, with the strongest emphasis placed on Analyze
and record business transactions using the double-entry system and accrual accounting principles,
Prepare and interpret financial statements in accordance with U, Apply cost behavior concepts,
cost-volume-profit analysis and and relevant costing to managerial decisions. Every item follows
the wording style and level of reasoning you meet in the real paper, and each one is paired with a
clear rationale so the correct choice is never a guess. Work through the set at your own pace,
mark the questions that slow you down, then come back to them until the reasoning feels
automatic. Learners who revise this way walk into the exam room recognising the pattern behind
the questions instead of meeting them for the first time. Keep going - steady, honest practice is
what turns a difficult paper into a comfortable pass.
Q1 ANALYZE AND RECORD BUSINESS TRANSACTIONS USING THE DOUBLE-ENTRY
SYSTEM AND ACCRUAL ACCOUNTING PRINCIPLES
A company using a perpetual inventory system discovers that a shipment of
goods costing $12,000, shipped FOB destination on December 28, was recorded
as a purchase on December 30; the goods arrived January 3. Year-end is
December 31. What adjusting entry is required under accrual accounting?
A. Debit Inventory $12,000; Credit Accounts Payable $12,000
B. Debit Accounts Payable $12,000; Credit Inventory $12,000 CORRECT
C. Debit Purchases $12,000; Credit Accounts Payable $12,000
D. No adjusting entry is required because title has not transferred.
RATIONALE: Under FOB destination, title transfers upon delivery, so the December 30 recording
was premature. The correcting entry reverses the erroneous purchase: debit Accounts Payable
and credit Inventory. Option A perpetuates the error; C uses a periodic account; D ignores the
need to correct the books for the premature recording.
Page 2
, Q2 ANALYZE AND RECORD BUSINESS TRANSACTIONS USING THE DOUBLE-ENTRY
SYSTEM AND ACCRUAL ACCOUNTING PRINCIPLES
A company has fixed costs of $120,000, a contribution margin ratio of 40%, and
desires a target profit of $60,000. What dollar sales are required to achieve the
target profit?
A. $300,000
B. $450,000 CORRECT
C. $500,000
D. $180,000
RATIONALE: Required sales = (Fixed costs + Target profit) / CM ratio = ($120,000 + $60,000) /
0.40 = $450,000. Option A ignores target profit; C incorrectly divides by 0.36; D adds only fixed
costs and target profit without dividing by CM ratio.
Q3 ANALYZE AND RECORD BUSINESS TRANSACTIONS USING THE DOUBLE-ENTRY
SYSTEM AND ACCRUAL ACCOUNTING PRINCIPLES
Which of the following best describes the effect of a stock split on the financial
statements?
A. It increases total stockholders' equity and reduces retained earnings.
B. It decreases par value per share and increases the number of shares outstanding, with no
change to total equity. CORRECT
C. It increases total assets and total stockholders' equity.
D. It reduces total stockholders' equity and increases paid-in capital.
RATIONALE: A stock split increases shares outstanding and proportionally reduces par value per
share, leaving total equity unchanged. Options A, C, and D incorrectly suggest changes to total
equity or assets, which do not occur in a split.
Page 3
MANAGERIAL ACCOUNTING QUESTIONS AND CORRECT
ANSWERS WITH RATIONALES NEW 2026-2027 UPDATE
50 QUESTIONS
TABLE OF CONTENTS
# TOPIC
1 Analyze and record business transactions using the double-entry system and accrual accounting
principles
2 Prepare and interpret financial statements in accordance with U
3 Apply cost behavior concepts, cost-volume-profit analysis, and relevant costing to managerial decisions
4 Evaluate internal control systems and ethical financial reporting under SOX and professional standards
5 Construct and critique operating and capital budgets, including variance analysis and performance
evaluation
6 WGU D196 Pre
7 Assessment Principles of Financial and Managerial Accounting Questions and Correct Answers with
Rationales New 2026
8 2027 Update
9 Foundations of Financial and Managerial Accounting
10 Applied Financial and Managerial Accounting
11 Advanced Financial and Managerial Accounting
12 Financial and Managerial Accounting Review
ABSTRACT
Page 1
,This study document brings together 50 carefully worded exam questions drawn from WGU D196
Pre-Assessment Principles of Financial and Managerial Accounting Questions and Correct
Answers with Rationales New 2026-2027 Update, with the strongest emphasis placed on Analyze
and record business transactions using the double-entry system and accrual accounting principles,
Prepare and interpret financial statements in accordance with U, Apply cost behavior concepts,
cost-volume-profit analysis and and relevant costing to managerial decisions. Every item follows
the wording style and level of reasoning you meet in the real paper, and each one is paired with a
clear rationale so the correct choice is never a guess. Work through the set at your own pace,
mark the questions that slow you down, then come back to them until the reasoning feels
automatic. Learners who revise this way walk into the exam room recognising the pattern behind
the questions instead of meeting them for the first time. Keep going - steady, honest practice is
what turns a difficult paper into a comfortable pass.
Q1 ANALYZE AND RECORD BUSINESS TRANSACTIONS USING THE DOUBLE-ENTRY
SYSTEM AND ACCRUAL ACCOUNTING PRINCIPLES
A company using a perpetual inventory system discovers that a shipment of
goods costing $12,000, shipped FOB destination on December 28, was recorded
as a purchase on December 30; the goods arrived January 3. Year-end is
December 31. What adjusting entry is required under accrual accounting?
A. Debit Inventory $12,000; Credit Accounts Payable $12,000
B. Debit Accounts Payable $12,000; Credit Inventory $12,000 CORRECT
C. Debit Purchases $12,000; Credit Accounts Payable $12,000
D. No adjusting entry is required because title has not transferred.
RATIONALE: Under FOB destination, title transfers upon delivery, so the December 30 recording
was premature. The correcting entry reverses the erroneous purchase: debit Accounts Payable
and credit Inventory. Option A perpetuates the error; C uses a periodic account; D ignores the
need to correct the books for the premature recording.
Page 2
, Q2 ANALYZE AND RECORD BUSINESS TRANSACTIONS USING THE DOUBLE-ENTRY
SYSTEM AND ACCRUAL ACCOUNTING PRINCIPLES
A company has fixed costs of $120,000, a contribution margin ratio of 40%, and
desires a target profit of $60,000. What dollar sales are required to achieve the
target profit?
A. $300,000
B. $450,000 CORRECT
C. $500,000
D. $180,000
RATIONALE: Required sales = (Fixed costs + Target profit) / CM ratio = ($120,000 + $60,000) /
0.40 = $450,000. Option A ignores target profit; C incorrectly divides by 0.36; D adds only fixed
costs and target profit without dividing by CM ratio.
Q3 ANALYZE AND RECORD BUSINESS TRANSACTIONS USING THE DOUBLE-ENTRY
SYSTEM AND ACCRUAL ACCOUNTING PRINCIPLES
Which of the following best describes the effect of a stock split on the financial
statements?
A. It increases total stockholders' equity and reduces retained earnings.
B. It decreases par value per share and increases the number of shares outstanding, with no
change to total equity. CORRECT
C. It increases total assets and total stockholders' equity.
D. It reduces total stockholders' equity and increases paid-in capital.
RATIONALE: A stock split increases shares outstanding and proportionally reduces par value per
share, leaving total equity unchanged. Options A, C, and D incorrectly suggest changes to total
equity or assets, which do not occur in a split.
Page 3
