WGU D076 EXAM WITH ALL QUESTIONS AND CORRECT ANSWERS
UPDATED 2025-2026!!
What three things must one determine before making a personal budget?
Income, expenses, and savings
Tax liabilities, expenses, and income
Expenses, interest payments, and savings
Liabilities, income, and expenses - ANSWER>>Income, expenses, and savings
A firm had sales of $100,000 this month. However the firm received only $90,000 in cash
from the sales. Why would the firm receive $10,000 less cash than its monthly sales?
Because the firm did not make all sales on cash
Because the firm purchased inventory on credit this month
Because the firm paid down $10,000 on a loan
Because the firm paid cash for inventory purchased - ANSWER>>Because the firm did
not make all sales on cash
Of course, what does an individual or a company actually do to keep their budget not
only effective, but also have them on their financial goals track? The specific things are
just: monitor your cash flows, reduce variable costs, and track your expenses; revise
the budget, categorize investments, track income; or reduce variable costs, account for
income, monitor loans outstanding.
Track cash flows, monitor cash flows, and revise the budget - ANSWER>>Track cash
flows, monitor cash flows, and revise the budget
What is the envelope method of budgeting?
Withdrawing cash at the beginning of the period and then allowing only a certain amount
to be available for each category of spending
Using a spreadsheet to track both your digital and physical expenditures of cash during
the month
,Paying all expenses during the month by check through the physical mailing system to
ensure that obligations are met in a timely manner
Tracking your credit and debit expenditures by updating and categorizing purchases
that appear on your bank statement - ANSWER>>Withdrawing cash at the beginning of
the period and then allowing only a certain amount to be available for each category of
spending
What is the purpose of long-term financial forecasts?
Cash budgeting
Investment and financing decisions
Determination of short-run operating needs
Development of strategies for savings, income, and expenses - ANSWER>>Investment
and financing decisions
Which of the following types of account do not vary with sales and are left to managerial
discretion?
Spontaneous accounts
Non-spontaneous accounts
Accounts receivable accounts
Fixed assets accounts - ANSWER>>Non-spontaneous accounts
Which account is a discretionary account?
Accounts receivable
Cash
Fixed assets
Notes payable - ANSWER>>Notes payable
At what rate can a firm grow without selling any new equity?
Retention rate
,Internal rate of return
Discount rate
Sustainable growth rate - ANSWER>>Sustainable growth rate
Why do fixed assets grow in lumps rather than proportionally with a sales increase?
A firm needs more fixed assets only if the DFN is negative.
A firm can only buy an integral amount of F/A, not the fraction that might be needed to
support the output increase.
A firm will outsource production until it can use an entire production facility.
A firm purchases fixed assets in proportion to sales. - ANSWER>>A firm must purchase
an entire fixed asset rather than just the portion needed to increase production.
What is the term for a forecast of short-run events that helps a business determine
whether it has enough cash?
Time value of money
Percent of sales forecast
Cash budget
Sustainable growth rate - ANSWER>>Cash budget
What is the purpose of a monthly cash budget?
To know how much cash you spend on both a monthly and yearly basis so you can
determine how much you have left over to invest
To make sure you have sufficient cash each month to pay your fixed expenses
To have documentation for tax and lending
To control cash inflows and outflows so you can balance income with expenditures and
savings - ANSWER>>To control cash inflows and outflows so you can balance income
with expenditures and savings
Under what circumstances would a firm borrow cash?
, When the net cash balance is less than or equal to zero
When the company's minimum cash balance for the period has been reached, but it
wants to be sure it will have adequate cash on hand to meet next month's beginning
cash requirements
When the beginning balance of cash plus the net cash is less than the minimum cash
balance for the month
When the firm's cash receipts are negative - ANSWER>> When the beginning cash
balance plus the net cash is less than the minimum cash balance required for month
How would you use the envelope method of budgeting to monitor cash flows?
Put the dollar amount budgeted for each category of your expenses in properly labeled
envelopes and then spend the money in each envelope on expenses in that category.
Put cash equal to the total sum of your expenses in one envelope, use that cash for all
your expenses, and then write down what you spent it on. Link budgeting software to
your financial accounts.
Use Excel to record all of your income, savings, and expenses. - ANSWER>>Put the
amount of money budgeted for each category of your expenses into labeled envelopes
and then spend the money in each envelope on expenses in that category.
How should you go about making changes to your budget?
Consider what changes you need to make, then implement them all at once in one fell
swoop to make the budget the best it can be in the shortest amount of time. Make a
number of changes at one time, categorizing them by how much profit they will bring
into you. Prioritize changes you would like to make and then introduce them one at a
time to make sure they work.
Make every possible and conceivable change you can immediately think of so you are
not losing one bit of your profit due to an ill, ineffective budget. - ANSWER>>Prioritize
first all changes that you would like to implement, and go through with it one at a time so
as to test the viability.
You are the financial manager of a firm. The marketing department has told you that the
expected sales increase for the next year is 15%. In conducting financial forecasting,
you increase cash, accounts receivable, and inventory accounts by 15%, the same as
the increase in projected sales. What type of accounts are these?
Discretionary accounts
UPDATED 2025-2026!!
What three things must one determine before making a personal budget?
Income, expenses, and savings
Tax liabilities, expenses, and income
Expenses, interest payments, and savings
Liabilities, income, and expenses - ANSWER>>Income, expenses, and savings
A firm had sales of $100,000 this month. However the firm received only $90,000 in cash
from the sales. Why would the firm receive $10,000 less cash than its monthly sales?
Because the firm did not make all sales on cash
Because the firm purchased inventory on credit this month
Because the firm paid down $10,000 on a loan
Because the firm paid cash for inventory purchased - ANSWER>>Because the firm did
not make all sales on cash
Of course, what does an individual or a company actually do to keep their budget not
only effective, but also have them on their financial goals track? The specific things are
just: monitor your cash flows, reduce variable costs, and track your expenses; revise
the budget, categorize investments, track income; or reduce variable costs, account for
income, monitor loans outstanding.
Track cash flows, monitor cash flows, and revise the budget - ANSWER>>Track cash
flows, monitor cash flows, and revise the budget
What is the envelope method of budgeting?
Withdrawing cash at the beginning of the period and then allowing only a certain amount
to be available for each category of spending
Using a spreadsheet to track both your digital and physical expenditures of cash during
the month
,Paying all expenses during the month by check through the physical mailing system to
ensure that obligations are met in a timely manner
Tracking your credit and debit expenditures by updating and categorizing purchases
that appear on your bank statement - ANSWER>>Withdrawing cash at the beginning of
the period and then allowing only a certain amount to be available for each category of
spending
What is the purpose of long-term financial forecasts?
Cash budgeting
Investment and financing decisions
Determination of short-run operating needs
Development of strategies for savings, income, and expenses - ANSWER>>Investment
and financing decisions
Which of the following types of account do not vary with sales and are left to managerial
discretion?
Spontaneous accounts
Non-spontaneous accounts
Accounts receivable accounts
Fixed assets accounts - ANSWER>>Non-spontaneous accounts
Which account is a discretionary account?
Accounts receivable
Cash
Fixed assets
Notes payable - ANSWER>>Notes payable
At what rate can a firm grow without selling any new equity?
Retention rate
,Internal rate of return
Discount rate
Sustainable growth rate - ANSWER>>Sustainable growth rate
Why do fixed assets grow in lumps rather than proportionally with a sales increase?
A firm needs more fixed assets only if the DFN is negative.
A firm can only buy an integral amount of F/A, not the fraction that might be needed to
support the output increase.
A firm will outsource production until it can use an entire production facility.
A firm purchases fixed assets in proportion to sales. - ANSWER>>A firm must purchase
an entire fixed asset rather than just the portion needed to increase production.
What is the term for a forecast of short-run events that helps a business determine
whether it has enough cash?
Time value of money
Percent of sales forecast
Cash budget
Sustainable growth rate - ANSWER>>Cash budget
What is the purpose of a monthly cash budget?
To know how much cash you spend on both a monthly and yearly basis so you can
determine how much you have left over to invest
To make sure you have sufficient cash each month to pay your fixed expenses
To have documentation for tax and lending
To control cash inflows and outflows so you can balance income with expenditures and
savings - ANSWER>>To control cash inflows and outflows so you can balance income
with expenditures and savings
Under what circumstances would a firm borrow cash?
, When the net cash balance is less than or equal to zero
When the company's minimum cash balance for the period has been reached, but it
wants to be sure it will have adequate cash on hand to meet next month's beginning
cash requirements
When the beginning balance of cash plus the net cash is less than the minimum cash
balance for the month
When the firm's cash receipts are negative - ANSWER>> When the beginning cash
balance plus the net cash is less than the minimum cash balance required for month
How would you use the envelope method of budgeting to monitor cash flows?
Put the dollar amount budgeted for each category of your expenses in properly labeled
envelopes and then spend the money in each envelope on expenses in that category.
Put cash equal to the total sum of your expenses in one envelope, use that cash for all
your expenses, and then write down what you spent it on. Link budgeting software to
your financial accounts.
Use Excel to record all of your income, savings, and expenses. - ANSWER>>Put the
amount of money budgeted for each category of your expenses into labeled envelopes
and then spend the money in each envelope on expenses in that category.
How should you go about making changes to your budget?
Consider what changes you need to make, then implement them all at once in one fell
swoop to make the budget the best it can be in the shortest amount of time. Make a
number of changes at one time, categorizing them by how much profit they will bring
into you. Prioritize changes you would like to make and then introduce them one at a
time to make sure they work.
Make every possible and conceivable change you can immediately think of so you are
not losing one bit of your profit due to an ill, ineffective budget. - ANSWER>>Prioritize
first all changes that you would like to implement, and go through with it one at a time so
as to test the viability.
You are the financial manager of a firm. The marketing department has told you that the
expected sales increase for the next year is 15%. In conducting financial forecasting,
you increase cash, accounts receivable, and inventory accounts by 15%, the same as
the increase in projected sales. What type of accounts are these?
Discretionary accounts
