ACCT 5315| D551 FRAUD AND FORENSIC ACCOUNTING(WGU) EXAM
WITH 100% ACCURATE ANSWERS
T or F: Businesses earn profits by converting financial, physical, and labor resources into goods
and services that satisfy consumer demands. This statement is - correct answers ✔✔True
John Hamilton borrowed $500,000 from Stone Creek Bank to open a new restaurant called
Sauce-It-Up. John transferred $450,000 of the cash he borrowed to the Company on first day of
the year. Which of the follow appropriately reflects the cash transactions between these
reporting entities? - correct answers ✔✔John: $50,000 increase
Sauce-It-Up: $450,000 increase
Stone Creek Bank: 500,000 decrease
If total assets increase then - correct answers ✔✔liabilities, common stock, or retained earnings
must increase.
Liabilities - correct answers ✔✔All of the answers are qualities of liabilities.
Which term describes assets generated through operations that have been reinvested into the
business? - correct answers ✔✔Retained earnings
Sims Company received cash from the issue of common stock. This event is - correct answers
✔✔an asset source transaction.
,Juarez Company acquired $1,200 from the issue of common stock. Which of the following
shows how this event will affect the company's accounting equation? The letters "NA" indicate
that the component of the equation is not affected. - correct answers ✔✔Assets: $1,200
Liabilities: NACommon
Stock: $1,200
Retained Earnings: NA
At the end of Year 1, Clayton Company had $6,000 of cash, $7,000 land, $2,000 of liabilities,
$3,000 of common stock, and $8,000 of retained earnings. During Year 2, Clayton experienced
the following events.
Borrowed $1,500 cash.
Earned $6,500 of cash revenue.
Paid $4,000 of cash expenses.
Paid $5,000 cash to purchase land.
Based on this information the amount of total assets, total liabilities, and retained earnings
appearing on the Year 2 financial statements is - correct answers ✔✔Assets: $17,000
Liabilities: $3,500
Retained Earnings: $10,500
Kilgore Company experienced the following events during its first accounting period.
(1) Issued common stock for $5,000 cash.
(2) Earned $3,000 of cash revenue.
(3) Paid $4,000 cash to purchase land.
(4) Paid cash dividends amounting to $400.
(5) Paid $2,200 of cash expenses.
Based on this information the amount of net income is - correct answers ✔✔$800.
,Retained earnings at the beginning of the period was $300. During the period, Kilgore Company
earned revenue of $1,100 and incurred expenses of $400. Assuming dividends paid to
stockholders were $200, the ending balance in retained earnings must have been: - correct
answers ✔✔$800
Kilgore Company experienced the following events during its first accounting period.
(1) Borrowed $10,000 cash from a creditor.
(2) Earned $5,000 of cash revenue.
(3) Paid $2,000 cash to pay off a portion of its note payable.
(4) Paid cash dividends amounting to $100.
(5) Paid $2,200 cash for operating cash expenses.
Based on this information, what is the amount of expense shown on the income statement? -
correct answers ✔✔$2,200.
The statement of changes in stockholders' equity presents - correct answers ✔✔an explanation
of the changes in the beginning and ending balances of stockholders' equity.
Which of the following transactions would be reported on the Statement of Changes in
Stockholders' Equity? - correct answers ✔✔Paid a $100 cash dividend to the owners
The statement of cash flows presents - correct answers ✔✔information in three categories
including operating, investing, and financial activities.
Kilgore Company experienced the following events during its first accounting period.
(1) Issued common stock for $5,000 cash.
(2) Earned $3,000 of cash revenue.
(3) Paid a $4,000 cash to purchase land.
(4) Paid cash dividends amounting to $400.
, (5) Paid $2,200 of cash expenses.
Based on this information, the amount of cash flow from investing activities appearing on the
statement of cash flows is - correct answers ✔✔$4,000 outflow.
Which of the following financial statements is prepared as of a specific date? - correct answers
✔✔Balance Sheet
Which of the following shows how recognizing cash revenue will affect a company's financial
statements?
Balance sheet Income Statement Statement of Cash Flows
Assets = Liabilities + Equity Rev. − Exp. = Net Inc.
A. + = NA + + NA − NA = NA NA
B. + = NA + + + − NA = + NA
C. + = NA + + + − NA = + + OA
D. + = NA + + + − NA = + + IA - correct answers ✔✔OPTION C
Cash generated through earnings is an asset source transaction. It causes assets (cash) and
equity (retained earnings) to increase. Since the company engaged in operations to generate
revenue, there is an effect on the income statement. Specifically, revenue and net income
increase. Since the cash inflow is from customers, it is an operating activity.
When a company earns revenue on account - correct answers ✔✔All of the answers are correct.
When a company earns revenue but does not get paid, it receives a promise from the customer
to collect cash in the future. This promise is shown on the balance sheet as an account titled
accounts receivable. Since the company has already done the work, it will recognize the
WITH 100% ACCURATE ANSWERS
T or F: Businesses earn profits by converting financial, physical, and labor resources into goods
and services that satisfy consumer demands. This statement is - correct answers ✔✔True
John Hamilton borrowed $500,000 from Stone Creek Bank to open a new restaurant called
Sauce-It-Up. John transferred $450,000 of the cash he borrowed to the Company on first day of
the year. Which of the follow appropriately reflects the cash transactions between these
reporting entities? - correct answers ✔✔John: $50,000 increase
Sauce-It-Up: $450,000 increase
Stone Creek Bank: 500,000 decrease
If total assets increase then - correct answers ✔✔liabilities, common stock, or retained earnings
must increase.
Liabilities - correct answers ✔✔All of the answers are qualities of liabilities.
Which term describes assets generated through operations that have been reinvested into the
business? - correct answers ✔✔Retained earnings
Sims Company received cash from the issue of common stock. This event is - correct answers
✔✔an asset source transaction.
,Juarez Company acquired $1,200 from the issue of common stock. Which of the following
shows how this event will affect the company's accounting equation? The letters "NA" indicate
that the component of the equation is not affected. - correct answers ✔✔Assets: $1,200
Liabilities: NACommon
Stock: $1,200
Retained Earnings: NA
At the end of Year 1, Clayton Company had $6,000 of cash, $7,000 land, $2,000 of liabilities,
$3,000 of common stock, and $8,000 of retained earnings. During Year 2, Clayton experienced
the following events.
Borrowed $1,500 cash.
Earned $6,500 of cash revenue.
Paid $4,000 of cash expenses.
Paid $5,000 cash to purchase land.
Based on this information the amount of total assets, total liabilities, and retained earnings
appearing on the Year 2 financial statements is - correct answers ✔✔Assets: $17,000
Liabilities: $3,500
Retained Earnings: $10,500
Kilgore Company experienced the following events during its first accounting period.
(1) Issued common stock for $5,000 cash.
(2) Earned $3,000 of cash revenue.
(3) Paid $4,000 cash to purchase land.
(4) Paid cash dividends amounting to $400.
(5) Paid $2,200 of cash expenses.
Based on this information the amount of net income is - correct answers ✔✔$800.
,Retained earnings at the beginning of the period was $300. During the period, Kilgore Company
earned revenue of $1,100 and incurred expenses of $400. Assuming dividends paid to
stockholders were $200, the ending balance in retained earnings must have been: - correct
answers ✔✔$800
Kilgore Company experienced the following events during its first accounting period.
(1) Borrowed $10,000 cash from a creditor.
(2) Earned $5,000 of cash revenue.
(3) Paid $2,000 cash to pay off a portion of its note payable.
(4) Paid cash dividends amounting to $100.
(5) Paid $2,200 cash for operating cash expenses.
Based on this information, what is the amount of expense shown on the income statement? -
correct answers ✔✔$2,200.
The statement of changes in stockholders' equity presents - correct answers ✔✔an explanation
of the changes in the beginning and ending balances of stockholders' equity.
Which of the following transactions would be reported on the Statement of Changes in
Stockholders' Equity? - correct answers ✔✔Paid a $100 cash dividend to the owners
The statement of cash flows presents - correct answers ✔✔information in three categories
including operating, investing, and financial activities.
Kilgore Company experienced the following events during its first accounting period.
(1) Issued common stock for $5,000 cash.
(2) Earned $3,000 of cash revenue.
(3) Paid a $4,000 cash to purchase land.
(4) Paid cash dividends amounting to $400.
, (5) Paid $2,200 of cash expenses.
Based on this information, the amount of cash flow from investing activities appearing on the
statement of cash flows is - correct answers ✔✔$4,000 outflow.
Which of the following financial statements is prepared as of a specific date? - correct answers
✔✔Balance Sheet
Which of the following shows how recognizing cash revenue will affect a company's financial
statements?
Balance sheet Income Statement Statement of Cash Flows
Assets = Liabilities + Equity Rev. − Exp. = Net Inc.
A. + = NA + + NA − NA = NA NA
B. + = NA + + + − NA = + NA
C. + = NA + + + − NA = + + OA
D. + = NA + + + − NA = + + IA - correct answers ✔✔OPTION C
Cash generated through earnings is an asset source transaction. It causes assets (cash) and
equity (retained earnings) to increase. Since the company engaged in operations to generate
revenue, there is an effect on the income statement. Specifically, revenue and net income
increase. Since the cash inflow is from customers, it is an operating activity.
When a company earns revenue on account - correct answers ✔✔All of the answers are correct.
When a company earns revenue but does not get paid, it receives a promise from the customer
to collect cash in the future. This promise is shown on the balance sheet as an account titled
accounts receivable. Since the company has already done the work, it will recognize the
