WGU D196 Pre-Assessment exam (Questions + Answers) Solved

What is the effect of a company's accounting department maintaining high ethical standards? -The company can report more favorable results in its financial statements. -The company's accounting information will decrease in value. -The company can hire fewer accountants to do the same amount of work. -The company's accounting information will increase in value. - Answer-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 used to record long term liabilities. -Financial statement data provide detailed internal budget information. -Financial statement data are often used in determining employee bonuses. -Financial statement data provide item-by-item product cost information. - Answer-Financial statement data are often used in determining employee bonuses. Which group establishes financial accounting rules in the United States? -Internal Revenue Service (IRS) -American Institute of Certified Public Accountants (AICPA) -Financial Accounting Standards Board (FASB) -International Accounting Standards Board (IASB) - Answer-Financial Accounting Standards Board (FASB) Which report is one of the three primary financial statements? -Statement of stakeholder funds -Statement of cash flows -Statement of the accounting cycle -Statement of management accounting - Answer-Statement of cash flows A company paid $5,000 cash in advertising costs. How does this transaction affect the paying company's accounting equation? -Assets decrease by $5,000; expenses increase by $5,000.-Assets decrease by $5,000; liabilities increase by $5,000. -Assets decrease by $5,000; revenues increase by $5,000. -Assets increase by $5,000; expenses increase by $5,000. - Answer-Assets decrease by $5,000; expenses increase by $5,000. What is a transaction? -Two parties exchanging something of value -An example of an online business document -A type of commonly used accounting software -A category of merchandiser or retailer - Answer-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? -Expenses decrease owners' equity. -Expenses increase liabilities. -Expenses decrease liabilities. -Expenses increase owners' equity. - Answer-Expenses decrease owners' equity