1|Page
WGU DI96 PRE-ASSESSMENT AND OA EXAM 2025 ACTUAL EXAM S (100%
CORRECT ANSWERS) /ALREADY GRADED A+
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.
Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Expenses decrease liabilities.
Expenses increase liabilities.
Expenses decrease owners' equity.
Expenses increase owners' equity.
Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
Liability
Expense
Asset
Equity
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
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?
The sum of expenses and dividends
Cash
Assets
The sum of revenues and expenses
, 2|Page
Assets
Which item is an expense item?
Cost of goods sold
Loans payable
Accounts receivable
Accounts payable
Cost of goods sold
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
Sales minus cost of goods sold
Which type of account is retained earnings?
Revenue
Asset
Equity
Liability
Equity
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
Paying employees
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.
It distinguishes between current and long-term assets.
WGU DI96 PRE-ASSESSMENT AND OA EXAM 2025 ACTUAL EXAM S (100%
CORRECT ANSWERS) /ALREADY GRADED A+
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.
Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation?
Expenses decrease liabilities.
Expenses increase liabilities.
Expenses decrease owners' equity.
Expenses increase owners' equity.
Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
Liability
Expense
Asset
Equity
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
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?
The sum of expenses and dividends
Cash
Assets
The sum of revenues and expenses
, 2|Page
Assets
Which item is an expense item?
Cost of goods sold
Loans payable
Accounts receivable
Accounts payable
Cost of goods sold
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
Sales minus cost of goods sold
Which type of account is retained earnings?
Revenue
Asset
Equity
Liability
Equity
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
Paying employees
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.
It distinguishes between current and long-term assets.
