WGU D196 OA & Pre-Assessment | tWO
COmPlete exAm VersiOns With GUArAnteeD
COrreCt AnsWers (A+ GrADeD
Which group establishes financial accounting rules in the United States?
-Internal Revenue Service (IRS)
-American Institute of Certified Public Accountants (AICPA)
-Financial Accounting Standards Board (FASB)
-International Accounting Standards Board (IASB) - CORRECT ANSWER --Financial
Accounting Standards Board (FASB)
Which report is one of the three primary financial statements?
-Statement of stakeholder funds
-Statement of cash flows
-Statement of the accounting cycle
-Statement of management accounting - CORRECT ANSWER --Statement of cash
flows
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; expenses increase by $5,000.
-Assets decrease by $5,000; liabilities increase by $5,000.
-Assets decrease by $5,000; revenues increase by $5,000.
-Assets increase by $5,000; expenses increase by $5,000. - CORRECT ANSWER --
Assets decrease by $5,000; expenses increase by $5,000.
What is a transaction?
-Two parties exchanging something of value
-An example of an online business document
-A type of commonly used accounting software
-A category of merchandiser or retailer - CORRECT ANSWER --Two parties
exchanging something of value
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing company?
-Expenses decrease owners' equity.
, -Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - CORRECT ANSWER --Expenses decrease
owners' equity.
What is the impact of expenses on the accounting equation?
-Expenses decrease owners' equity.
-Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - CORRECT ANSWER --Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both examples of?
-Asset
-Equity
-Expense
-Liability - CORRECT ANSWER --Liability
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 -
CORRECT ANSWER --To turn information about transactions into financial statements
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount?
-Cash
-The sum of expenses and dividends
-Assets
-The sum of revenues and expenses - CORRECT ANSWER --Assets
Which item is an expense item?
-Accounts receivable
-Accounts payable
-Cost of goods sold
-Loans payable - CORRECT ANSWER --Cost of goods sold
How is gross profit computed?
-Sales minus cost of goods sold
-Total revenues minus total expenses
-Accounts receivable minus accounts payable
-Total assets minus total liabilities - CORRECT ANSWER --Sales minus cost of goods
sold
COmPlete exAm VersiOns With GUArAnteeD
COrreCt AnsWers (A+ GrADeD
Which group establishes financial accounting rules in the United States?
-Internal Revenue Service (IRS)
-American Institute of Certified Public Accountants (AICPA)
-Financial Accounting Standards Board (FASB)
-International Accounting Standards Board (IASB) - CORRECT ANSWER --Financial
Accounting Standards Board (FASB)
Which report is one of the three primary financial statements?
-Statement of stakeholder funds
-Statement of cash flows
-Statement of the accounting cycle
-Statement of management accounting - CORRECT ANSWER --Statement of cash
flows
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; expenses increase by $5,000.
-Assets decrease by $5,000; liabilities increase by $5,000.
-Assets decrease by $5,000; revenues increase by $5,000.
-Assets increase by $5,000; expenses increase by $5,000. - CORRECT ANSWER --
Assets decrease by $5,000; expenses increase by $5,000.
What is a transaction?
-Two parties exchanging something of value
-An example of an online business document
-A type of commonly used accounting software
-A category of merchandiser or retailer - CORRECT ANSWER --Two parties
exchanging something of value
A company borrowed $80,000 cash from a bank.
How does this transaction affect the accounting equation of the borrowing company?
-Expenses decrease owners' equity.
, -Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - CORRECT ANSWER --Expenses decrease
owners' equity.
What is the impact of expenses on the accounting equation?
-Expenses decrease owners' equity.
-Expenses increase liabilities.
-Expenses decrease liabilities.
-Expenses increase owners' equity. - CORRECT ANSWER --Expenses decrease
owners' equity.
Which type of account are accounts payable and notes payable both examples of?
-Asset
-Equity
-Expense
-Liability - CORRECT ANSWER --Liability
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 -
CORRECT ANSWER --To turn information about transactions into financial statements
According to the accounting equation, the amount of liabilities and equity must always
be equal to another amount.
What is that other amount?
-Cash
-The sum of expenses and dividends
-Assets
-The sum of revenues and expenses - CORRECT ANSWER --Assets
Which item is an expense item?
-Accounts receivable
-Accounts payable
-Cost of goods sold
-Loans payable - CORRECT ANSWER --Cost of goods sold
How is gross profit computed?
-Sales minus cost of goods sold
-Total revenues minus total expenses
-Accounts receivable minus accounts payable
-Total assets minus total liabilities - CORRECT ANSWER --Sales minus cost of goods
sold
