WGU D774 PRE-ASSESSEMENT /WGU D774
INTRODUCTION TO BUSINESS PA EXAM
2025/2026 WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED
ANSWERS |FREQUENTLY TESTED
QUESTIONS AND SOLUTIONS |ALREADY
GRADED A+|NEWEST|BRAND NEW
VERSION!!|LATEST UPDATE
How is net income computed?
Calculated as the difference between revenues and all expenses.
What is a multi-step income statement?
Where the income statement is divided into separate sections, and various subtotals are
reported that reflect different levels of profitability.
What is a common-size income statement?
Where the income statement numbers have been standardized as a percentage of sales.
When the terms are correctly used, what is the difference between revenue and income?
Income is a net concept whereas revenue is a gross concept.
How is net income computed?
revenues minus expenses
In a carefully constructed multi-step income statement, which item is listed between sales and
gross profit?
Cost of goods sold
When should a passenger airline report the revenue associated with a passenger trip?
When the customer has completed the trip
In a multi-step income statement, what is an example of an expense that fits under the heading
"operating expenses"?
,Rent paid for a building used by the company
A report that enables users to analyze a company's performance over multiple periods and
identify significant trends is a ____________ income statement.
Comparative
What are costs incurred to support normal business operations?
Expenses
What is the single most used number in all the financial statements is net ___________?
Income
An income statement in which all of the numbers have been divided by sales is called a
_________ size income statement.
Common
Sales are not recorded until they are __________.
Earned
Revenue minus cost of goods sold is equal to ________ margin.
Gross
What are the three categories of cash flows shown on the statement of cash flows?
Operating, Investing, and Financing.
What are investing activities as shown on the statement of cash flows?
Are those activities associated with buying and selling long-term assets—primarily the purchase
and sale of land, buildings, and equipment.
Activities whereby cash is obtained from or repaid to owners and creditors would be considered
which type of activity on the statement of cash flows?
Financing activities
Consider the following three cash flows.
Cash paid for income taxes
Cash paid to repay a loan
Cash paid to purchase land
Which sequence represents the correct categorization of these three cash flows?
, Pay income taxes—operating; Repay loan—financing; Pay for land—investing
Consider the following three cash flows.
Cash received from selling goods
Cash received from the sale of a building
Cash received from borrowing money
Which sequence represents the correct categorization of these three cash flows?
From selling goods—operating; from sale of building—investing; from borrowing money—
financing
Here are some financial statement items for the year for Whole Pine Inc.
Cash paid to employees for wages, Cash received from selling goods, Cash paid for dividends,
Cash paid for income taxes, Cash received from the sale of land, Cash received from the sale of a
building, Cash paid to purchase a new building, Cash paid to repay a loan, Cash received from
borrowing money, Cash paid for monthly utilities, Cash paid to purchase land, Cash received
from providing services, Cash received as new investment from owners
Which items should be included in the computation of Whole Pine's total cash from investing
activities?
Cash paid to purchase a new building and cash received from the sale of land
Which statement is a correct description of financing activities?
Those activities whereby cash is obtained from or repaid to owners and creditors
Which statement is a correct description of operating activities?
Those activities that are part of the day-to-day business of a company
Cash paid for buying _________ is an operating activity.
Inventory
Cash collected for selling __________ is an investing activity.
Land
The statement of cash flows reports information for a _________ of time.
Period
Cash collected from _________ is a financing activity.
Borrowing
INTRODUCTION TO BUSINESS PA EXAM
2025/2026 WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED
ANSWERS |FREQUENTLY TESTED
QUESTIONS AND SOLUTIONS |ALREADY
GRADED A+|NEWEST|BRAND NEW
VERSION!!|LATEST UPDATE
How is net income computed?
Calculated as the difference between revenues and all expenses.
What is a multi-step income statement?
Where the income statement is divided into separate sections, and various subtotals are
reported that reflect different levels of profitability.
What is a common-size income statement?
Where the income statement numbers have been standardized as a percentage of sales.
When the terms are correctly used, what is the difference between revenue and income?
Income is a net concept whereas revenue is a gross concept.
How is net income computed?
revenues minus expenses
In a carefully constructed multi-step income statement, which item is listed between sales and
gross profit?
Cost of goods sold
When should a passenger airline report the revenue associated with a passenger trip?
When the customer has completed the trip
In a multi-step income statement, what is an example of an expense that fits under the heading
"operating expenses"?
,Rent paid for a building used by the company
A report that enables users to analyze a company's performance over multiple periods and
identify significant trends is a ____________ income statement.
Comparative
What are costs incurred to support normal business operations?
Expenses
What is the single most used number in all the financial statements is net ___________?
Income
An income statement in which all of the numbers have been divided by sales is called a
_________ size income statement.
Common
Sales are not recorded until they are __________.
Earned
Revenue minus cost of goods sold is equal to ________ margin.
Gross
What are the three categories of cash flows shown on the statement of cash flows?
Operating, Investing, and Financing.
What are investing activities as shown on the statement of cash flows?
Are those activities associated with buying and selling long-term assets—primarily the purchase
and sale of land, buildings, and equipment.
Activities whereby cash is obtained from or repaid to owners and creditors would be considered
which type of activity on the statement of cash flows?
Financing activities
Consider the following three cash flows.
Cash paid for income taxes
Cash paid to repay a loan
Cash paid to purchase land
Which sequence represents the correct categorization of these three cash flows?
, Pay income taxes—operating; Repay loan—financing; Pay for land—investing
Consider the following three cash flows.
Cash received from selling goods
Cash received from the sale of a building
Cash received from borrowing money
Which sequence represents the correct categorization of these three cash flows?
From selling goods—operating; from sale of building—investing; from borrowing money—
financing
Here are some financial statement items for the year for Whole Pine Inc.
Cash paid to employees for wages, Cash received from selling goods, Cash paid for dividends,
Cash paid for income taxes, Cash received from the sale of land, Cash received from the sale of a
building, Cash paid to purchase a new building, Cash paid to repay a loan, Cash received from
borrowing money, Cash paid for monthly utilities, Cash paid to purchase land, Cash received
from providing services, Cash received as new investment from owners
Which items should be included in the computation of Whole Pine's total cash from investing
activities?
Cash paid to purchase a new building and cash received from the sale of land
Which statement is a correct description of financing activities?
Those activities whereby cash is obtained from or repaid to owners and creditors
Which statement is a correct description of operating activities?
Those activities that are part of the day-to-day business of a company
Cash paid for buying _________ is an operating activity.
Inventory
Cash collected for selling __________ is an investing activity.
Land
The statement of cash flows reports information for a _________ of time.
Period
Cash collected from _________ is a financing activity.
Borrowing
