WGU D196 EXAM 2025 QUESTIONS WITH
ANSWERS
GAAP - ANSWER Set of accounting standards in the United States
IASB (International Accounting Standards Board) - ANSWER the
organization formed to develop worldwide accounting standards
Financial accounting cycle - ANSWER 1) analyze transactions(business
documents ie structure data), 2)record effects(design code or system that
captures data). 3)summarize effects(distil cumulative effects of even trillions of
transactions) 4) prepare reports(decision makers need to know)
Owner's Equity - ANSWER the amount remaining after the value of all
liabilities is subtracted from the value of all assets
How is each amount calculated in a common size income statement? -
ANSWER Each amount is expressed as a percentage of sales for the year
What is an asset? - ANSWER Anything of value that is owned
What is an example of an asset? - ANSWER Accounts receivable
What is a liability? - ANSWER the legal obligation to pay debts
What is the definition of revenue? - ANSWER Money earned from providing a
product or service
, Cost of Goods Sold - ANSWER the amount of money a firm spent to buy or
produce the products it sold during the period to which the income statement
applies
Operating Activities - ANSWER Cash flow activities that include the cash
effects of transactions that create revenues and expenses and thus enter into the
determination of net income.
Balance Sheet - ANSWER A financial statement that reports assets, liabilities,
and owner's equity at a specific date.
Statement of Cash Flows - ANSWER A financial statement that presents the
financial activities related to the cash receipts and cash payments of a business
during a given period.
When is vertical financial statement analysis most valuable? - ANSWER
When comparing companies in similar industries
Which section of the SEC's website contains company annual report on form
10-K filings ? - ANSWER EDGAR
What is the definition of expense ? - ANSWER The amount of assets
consumed through business operations
Which below is a revenue item ?
A) cash
B) sales
ANSWERS
GAAP - ANSWER Set of accounting standards in the United States
IASB (International Accounting Standards Board) - ANSWER the
organization formed to develop worldwide accounting standards
Financial accounting cycle - ANSWER 1) analyze transactions(business
documents ie structure data), 2)record effects(design code or system that
captures data). 3)summarize effects(distil cumulative effects of even trillions of
transactions) 4) prepare reports(decision makers need to know)
Owner's Equity - ANSWER the amount remaining after the value of all
liabilities is subtracted from the value of all assets
How is each amount calculated in a common size income statement? -
ANSWER Each amount is expressed as a percentage of sales for the year
What is an asset? - ANSWER Anything of value that is owned
What is an example of an asset? - ANSWER Accounts receivable
What is a liability? - ANSWER the legal obligation to pay debts
What is the definition of revenue? - ANSWER Money earned from providing a
product or service
, Cost of Goods Sold - ANSWER the amount of money a firm spent to buy or
produce the products it sold during the period to which the income statement
applies
Operating Activities - ANSWER Cash flow activities that include the cash
effects of transactions that create revenues and expenses and thus enter into the
determination of net income.
Balance Sheet - ANSWER A financial statement that reports assets, liabilities,
and owner's equity at a specific date.
Statement of Cash Flows - ANSWER A financial statement that presents the
financial activities related to the cash receipts and cash payments of a business
during a given period.
When is vertical financial statement analysis most valuable? - ANSWER
When comparing companies in similar industries
Which section of the SEC's website contains company annual report on form
10-K filings ? - ANSWER EDGAR
What is the definition of expense ? - ANSWER The amount of assets
consumed through business operations
Which below is a revenue item ?
A) cash
B) sales
