WGU D196 TEST 2026 FINAL REVIEW
QUESTIONS ANSWERS BUNDLED PRACTICE
COLLECTION
◉ Why might employees be interested in their company's financial
accounting information?
Answer: Financial statement data are often used in determining
employee bonuses.
◉ Which group establishes financial accounting rules in the United
States?
Answer: Financial Accounting Standards Board (FASB)
◉ Which report is one of the three primary financial statements?
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?
Answer: Assets decrease by $5,000; expenses increase by $5,000.
◉ What is a transaction?
, 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?
Answer: Expenses decrease owners' equity.
◉ What is the impact of expenses on the accounting equation?
Answer: Expenses decrease owners' equity.
◉ Which type of account are accounts payable and notes payable
both examples of?
Answer: Liability
◉ What is the purpose of the financial accounting cycle?
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?
Answer: Assets
QUESTIONS ANSWERS BUNDLED PRACTICE
COLLECTION
◉ Why might employees be interested in their company's financial
accounting information?
Answer: Financial statement data are often used in determining
employee bonuses.
◉ Which group establishes financial accounting rules in the United
States?
Answer: Financial Accounting Standards Board (FASB)
◉ Which report is one of the three primary financial statements?
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?
Answer: Assets decrease by $5,000; expenses increase by $5,000.
◉ What is a transaction?
, 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?
Answer: Expenses decrease owners' equity.
◉ What is the impact of expenses on the accounting equation?
Answer: Expenses decrease owners' equity.
◉ Which type of account are accounts payable and notes payable
both examples of?
Answer: Liability
◉ What is the purpose of the financial accounting cycle?
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?
Answer: Assets
