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WGU D196 OBJECTIVE ASSESSMENT FINAL EXAM
VERSION 2 2025/2026 NEWEST ACTUAL EXAM WITH
COMPLETE QUESTIONS AND VERIFIED ANSWERS
|ALREADY GRADED A+|
In the context of the financial accounting cycle, what is the
definition of an account? - ANSWER-A specific accounting record
that provides an efficient way to categorize similar types of
transactions
An account is a specific accounting record that provides an
efficient way to categorize similar transactions. You can think of
an individual account as a summary of every transaction affecting
a certain item, such as cash. Examples of asset accounts are
cash, inventory, and equipment. Liability accounts include
accounts payable and notes payable.
What is an arm's-length transaction? - ANSWER-An exchange
between two independent parties
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Which event represents a transaction recorded as part of the
financial accounting cycle? - ANSWER-The sale of a product for
cash or on account
The sale of a product is an external transaction and is recorded
on a company's books.
A company sells a product to a customer on account. Which
part(s) of the accounting equation does this particular transaction
change? - ANSWER-Both assets and owners' equity
What is an example of an internal transaction? - ANSWER-An
employee is transferred from one department to another.
An internal transaction occurs within the company instead of with
an external party, and it is not recorded in the company's books.
Oliver is an accountant for a restaurant supply business that sells
dishes, table linens, and food preparation equipment to
restaurants. In preparing the January financial statements for the
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company, Oliver must consider all of the financial events that
occurred during the month, including purchases from vendors,
sales to customers, and other transactions.
What is the first step of the financial accounting cycle that Oliver
will perform? - ANSWER-Analyze transactions
Which item is a liability? - ANSWER-Mortgage
Which of the items listed should Oliver record as an external
transaction? - ANSWER-Purchases of inventory from suppliers
After Oliver records each transaction, how should he ensure that
the accounting equation remains in balance? - ANSWER-Add up
the balances in all of the asset accounts and compare them to the
sum of all the liability and owners' equity accounts
Because Assets = Liabilities + Owners' Equity, this is the correct
way to determine the equality of the accounting equation.
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After determining the company's financial position, Oliver
recommends that the company borrow money from the bank for
the next accounting period.
What is the effect of borrowing money from the bank for the next
accounting period on the company's books? - ANSWER-Cash (an
asset) and a liability account both increase.
This transaction brings more cash into the company by increasing
the company's liability to the bank.
Which account is an example of a liability? - ANSWER-Accounts
payable
Accounts payable is a liability because it represents resources
that require repayment.
Which of the primary financial statements reports the amount of
cash collected and paid out by a company? - ANSWER-
Statement of cash flows
WGU D196 OBJECTIVE ASSESSMENT FINAL EXAM
VERSION 2 2025/2026 NEWEST ACTUAL EXAM WITH
COMPLETE QUESTIONS AND VERIFIED ANSWERS
|ALREADY GRADED A+|
In the context of the financial accounting cycle, what is the
definition of an account? - ANSWER-A specific accounting record
that provides an efficient way to categorize similar types of
transactions
An account is a specific accounting record that provides an
efficient way to categorize similar transactions. You can think of
an individual account as a summary of every transaction affecting
a certain item, such as cash. Examples of asset accounts are
cash, inventory, and equipment. Liability accounts include
accounts payable and notes payable.
What is an arm's-length transaction? - ANSWER-An exchange
between two independent parties
, Page |2
Which event represents a transaction recorded as part of the
financial accounting cycle? - ANSWER-The sale of a product for
cash or on account
The sale of a product is an external transaction and is recorded
on a company's books.
A company sells a product to a customer on account. Which
part(s) of the accounting equation does this particular transaction
change? - ANSWER-Both assets and owners' equity
What is an example of an internal transaction? - ANSWER-An
employee is transferred from one department to another.
An internal transaction occurs within the company instead of with
an external party, and it is not recorded in the company's books.
Oliver is an accountant for a restaurant supply business that sells
dishes, table linens, and food preparation equipment to
restaurants. In preparing the January financial statements for the
, Page |3
company, Oliver must consider all of the financial events that
occurred during the month, including purchases from vendors,
sales to customers, and other transactions.
What is the first step of the financial accounting cycle that Oliver
will perform? - ANSWER-Analyze transactions
Which item is a liability? - ANSWER-Mortgage
Which of the items listed should Oliver record as an external
transaction? - ANSWER-Purchases of inventory from suppliers
After Oliver records each transaction, how should he ensure that
the accounting equation remains in balance? - ANSWER-Add up
the balances in all of the asset accounts and compare them to the
sum of all the liability and owners' equity accounts
Because Assets = Liabilities + Owners' Equity, this is the correct
way to determine the equality of the accounting equation.
, Page |4
After determining the company's financial position, Oliver
recommends that the company borrow money from the bank for
the next accounting period.
What is the effect of borrowing money from the bank for the next
accounting period on the company's books? - ANSWER-Cash (an
asset) and a liability account both increase.
This transaction brings more cash into the company by increasing
the company's liability to the bank.
Which account is an example of a liability? - ANSWER-Accounts
payable
Accounts payable is a liability because it represents resources
that require repayment.
Which of the primary financial statements reports the amount of
cash collected and paid out by a company? - ANSWER-
Statement of cash flows
