WGU D276 PRE-ASSESSMENT PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+<RECENT VERSION>

WGU D276 PRE-ASSESSMENT PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+&lt;RECENT VERSION&gt; 1. What is an example of direct materials? Cost of robotic equipment in making automobiles Cost of sandpaper in making wood furniture Cost of saws and hammers in constructing a house Cost of aluminum in making an airplane - answer cost of aluminum in making an airplane 2. What is the effect of a company's accounting department maintaining high ethical standards? The company can hire fewer accountants to do the same amount of work. The company can report more favorable results in its financial statements. The company's accounting information will increase in value. The company's accounting information will decrease in value. - answer the company's accounting information will increase in value. 3. 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 are often used in determining employee bonuses. Financial statement data provide item-by-item product cost information. Financial statement data provide detailed internal budget information. - answer financial statement data are often used in determining employee bonuses. 4. Which group establishes financial accounting rules in the united states? Internal revenue service (irs) Financial accounting standards board (fasb) International accounting standards board (iasb) American institute of certified public accountants (aicpa) - answer financial accounting standards board (fasb) 5. Which report is one of the three primary financial statements? Statement of management accounting Statement of the accounting cycle Statement of stakeholder funds Statement of cash flows - answer statement of cash flows 6. 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; liabilities increase by $5,000. Assets increase by $5,000; expenses increase by $5,000. Assets decrease by $5,000; expenses increase by $5,000. Assets decrease by $5,000; revenues increase by $5,000. - answer assets decrease by $5,000; expenses increase by $5,000. 7. What is a transaction? Two parties exchanging something of value A type of commonly used accounting software A category of merchandiser or retailer An example of an online business document - answer two parties exchanging something of value 8. A company borrowed $80,000 cash from a bank. How does this transaction affect the accounting equation of the borrowing company? Assets increase by $80,000; liabilities increase by $80,000. Assets increase by $80,000; owners' equity increases by $80,000. Assets increase by $80,000; liabilities decrease by $80,000. Assets increase by $80,000; revenues increase by $80,000. - answer assets increase by $80,000; liabilities increase by $80,000. 9. What is the impact of expenses on the accounting equation? Expenses decrease liabilities. Expenses increase liabilities. Expenses decrease owners' equity. Expenses increase owners' equity. - answer expenses decrease owners' equity. 10. Which type of account are accounts payable and notes payable both examples of? Liability Expense Asset Equity - answer liability 11. What is the purpose of the financial accounting cycle? To turn information about transactions into financial statements To gather information related to the expenses and income generated by a company To produce and analyze a company's monthly bank statement To collect confidential information for management to use as a competitive tool - answer to turn information about transactions into financial statements 12. According to the accounting equation, the amount of liabilities and equity must always be equal to another amount. What is that other amount? The sum of expenses and dividends Cash Assets The sum of revenues and expenses - answer assets 13. Which item is an expense item? Cost of goods sold Loans payable Accounts receivable Accounts payable - answer cost of goods sold 14. How is gross profit computed? Total revenues minus total expenses Sales minus cost of goods sold Accounts receivable minus accounts payable Total assets minus total liabilities - answer sales minus cost of goods sold 15. Which type of account is retained earnings? Revenue Asset Equity Liability - answer equity 16. For purposes of cash flow classification in the statement of cash flows, which item is an operating activity? Buying equipment Selling bonds Distributing dividends Paying employees - answer paying employees 17. How does a classified balance sheet provide useful information to a decision maker? It distinguishes between current and long-term assets. It provides data for a period of time instead of as a point in time. It distinguishes liabilities from expenses. It provides data that are not publicly disclosed. - answer it distinguishes between current and long-term assets. 18. 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 - answer 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 - answer the amount owed by a company that purchased goods or services from a supplier on credit 20. Horizontal and vertical analysis - answer 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 The increase in production cost over the past two years - answer 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 - answer increasing the proportion of gross profit to sales by about 2% Managing cash flow - answer 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? 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. - answer 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 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. - answer 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 - answer increased hiring, training, and overtime costs 26. What does a manager have control over in a cost center? Revenues Dividends 27. Assets 28. Costs - answer costs 29. 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 - answer only controllable costs 30. 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. - answer uncontrollable costs should not be included in the performance evaluation measure of a profit center manager. 31. Which budget should include the expected cost of supplies used by the office staff of the corporate headquarters? Sales budget Direct materials budget Production budget Administrative expense budget - answer administrative expense budget 32. 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 - answer customer tastes and economic conditions 33. 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 - answer sales, production, direct materials 34. Which type of business organization has a major focus on direct materials, direct labor, and overhead? Manufacturing Service Retail Merchandising - answer manufacturing 35. What are the three primary functions that company managers use managerial accounting information for? Planning, controlling, and evaluating Operating, investing, and financing Borrowing, repaying, and lending Reporting, allowing, and negotiating - answer planning, controlling, and evaluating