WGU D196 Pre-Assessment: Exam Questions With Correct Answers / Latest Update Graded A+ (2023/2024)

What information does a balance sheet provide to a decision maker? Summary of the operating performance of a company during a period Summary of the financial position of a company at a particular date Summary of the cash flows of a company during a period Summary of the operating performance of a company at a particular date ANS - Summary of the financial position of a company at a particular date 19. What is an account payable? The amount owed by a company that purchased goods or services from a supplier on credit The amount owed to a company that sold goods or services to a customer on credit The amount to be paid by a company in repayment of both loans and dividends The amount to be paid by a company for dividends to shareholders ANS The amount owed by a company that purchased goods or services from a supplier on credit 20. Horizontal and Vertical Analysis 21. Based on your analysis, what should management be concerned about? The increase in interest expenses over the past two years The increase in operating expenses over the past two years The increase in income taxes over the past two years 8 / 12 The increase in production cost over the past two years ANS The increase in operating expenses over the past two years You Selected 22. Which action would make the profitability of the company in 20X9 the same as in 20X7? Increasing the proportion of gross profit to sales by about 2% Paying back interest expenses earlier in the year Decreasing the proportion of operating income to sales by about 2% Increasing the operating expenses by about $20,000 ANS Increasing the proportion of gross profit to sales by about 2% 23. Why is the net cash for December negative while total sales for December are the highest out of the months from October through December? 9 / 12 December general and administrative expenses are expected to be much higher. Credit sales are disproportionately low wiith respect to total sales compared to other months. December cash use is disproportionally high with respect to total sales compared to other months. Total cash available does not reflect December sales because there was a high volume of credit sales. ANS Total cash available does not reflect December sales because there was a high volume of credit sales. 24. How can Whole Pine avoid having negative net cash flows in December? Postpone purchasing the new equipment and do not pay cash dividends to shareholders. Promote cash sales with the goal of having $230,000 in cash sales and only $210,000 in credit sales. Instead of paying for credit purchases of inventory a month after the purchase, pay two months after the purchase. Collect 50% of the credit sales in the month of credit sales and 30% in the month following the credit sales. You Selected Promote cash sales with the goal of having $230,000 in cash sales and only $210,000 in credit sales. Instead of paying for credit purchases of inventory a month after the pur- 10 / 12 chase, pay two months after the purchase. Collect 50% of the credit sales in the month of credit sales and 30% in the month following the credit sales. ANS Postpone purchasing the new equipment and do not pay cash dividends to shareholders. 25. What is an example of a financial cost that would result from poor direct labor budgeting and planning? Delayed cash collections from credit customers Excessive inventory storage costs Increased hiring, training, and overtime costs Increased depreciation costs for facilities ANS Increased hiring, training, and over- time costs 26. What does a manager have control over in a cost center? Revenues Dividends 11 / 12 Assets Costs ANS Costs 27. What should be considered when developing a measure to evaluate the performance of a manager? Only centralized costs Only indirect costs Only noncontrollable costs Only controllable costs ANS Only controllable costs 28. In some companies, the performance measures for profit center managers are heavily influenced by cost allocations downward from organizational units (such as company headquarters). Why is this a mistake? Direct costs should not be included in the performance evaluation measure of a profit center manager. Uncontrollable costs should not be included in the performance evaluation measure of a profit center manager. Revenues should not be included in the performance evaluation measure of a profit center manager. Controllable costs should not be included in the performance evaluation measure of a profit center manager. ANS Uncontrollable costs should not be includ- ed in the performance evaluation measure of a profit center manager. 29. Which budget should include the expected cost of supplies used by the office staff of the corporate headquarters? Sales budget 12 / 12 Direct materials budget Production budget Administrative expense budget ANS Administrative expense budget 30. Which items are uncontrollable, external variables that make it difficult to forecast the level of sales? Selling price and sales effort Customer tastes and economic conditions ANS Customer tastes and economic conditions 31. What is the correct sequence of budgets in a manufacturing business? Sales, direct materials, production Direct materials, sales, production Production, direct materials, sales Sales, production, direct materials ANS Sales, production, direct materials 13 / 12 32. Which type of business organization has a major focus on direct materials, direct labor, and overhead?