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D196
WGU D196 pre- Assessment (NEW 2026/ 2027 Update)
Principles of Financial and Managerial Accounting Review|
Questions & Answers | Grade A| 100% Correct
1. A nurse manager is preparing the unit budget. Which budget should include costs for
items like medical gas, equipment depreciation, and unit clerk salaries, but not the cost
of medications (direct materials) or nurse wages (direct labor)?
A. Sales budget
B. Direct materials budget
C. Manufacturing overhead budget
D. Production budget
CORRECT ANSWER: C
Rationale: The manufacturing (or in healthcare, service) overhead budget includes all
indirect production costs, such as supplies, utilities, depreciation, and indirect labor,
excluding direct materials and direct labor.
2. Which of the following is a common asset account on a hospital's balance sheet?
A. Accounts Payable
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B. Equity
C. Accounts Receivable
D. Utilities Expense
CORRECT ANSWER: C
Rationale: Accounts Receivable is an asset representing money owed to the hospital for
services provided. Accounts Payable is a liability, Equity is owner's interest, and Utilities
Expense is an income statement account.
3. On which financial statement would a nurse executive find the valuation of the
hospital's building, medical equipment, and current inventory?
A. Statement of Cash Flows
B. Balance Sheet
C. Income Statement
D. Statement of Retained Earnings
CORRECT ANSWER: B
Rationale: The Balance Sheet provides a snapshot of the organization's financial position
at a point in time, listing assets (what it owns), liabilities (what it owes), and equity.
4. What is the final step in the accounting cycle for a healthcare organization?
A. Summarize the effects of transactions
B. Analyze transactions
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C. Prepare reports (financial statements)
D. Record the effects of transactions
CORRECT ANSWER: C
Rationale: The final purpose of the accounting cycle is to produce financial reports (the
income statement, balance sheet, etc.) that summarize the organization's financial
activity for decision-makers.
5. Which of the following is not considered an accounting transaction?
A. Receive cash from a patient in payment of a bill.
B. Purchase a new patient monitor from a supplier.
C. Provide nursing services to a patient on credit.
D. Preparing the annual financial statements.
CORRECT ANSWER: D
Rationale: Preparing statements is an internal process, not a transactional exchange
between the entity and an external party. Transactions involve an exchange of value
that changes the financial position.
6. On which financial statement would a potential investor see if a hospital issued bonds
or paid dividends?
A. Statement of Cash Flows
B. Balance Sheet
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C. Income Statement
D. Statement of Retained Earnings
CORRECT ANSWER: A
Rationale: The Statement of Cash Flows shows cash inflows and outflows from
operating, investing, and financing activities. Issuing debt (borrowing) and paying
dividends are financing activities.
7. Whose job is it to ensure that investors are provided with full and fair information
about publicly traded healthcare companies?
A. Financial Accounting Standards Board (FASB)
B. American Institute of CPAs (AICPA)
C. International Accounting Standards Board (IASB)
D. Securities and Exchange Commission (SEC)
CORRECT ANSWER: D
Rationale: The SEC is the U.S. government agency responsible for protecting investors
and maintaining fair, orderly, and efficient markets by requiring full and fair financial
disclosure from public companies.
8. How does a classified balance sheet provide more useful information to a hospital
board member than an unclassified one?
A. It distinguishes between current assets (like cash) and long-term assets (like
D196
D196
WGU D196 pre- Assessment (NEW 2026/ 2027 Update)
Principles of Financial and Managerial Accounting Review|
Questions & Answers | Grade A| 100% Correct
1. A nurse manager is preparing the unit budget. Which budget should include costs for
items like medical gas, equipment depreciation, and unit clerk salaries, but not the cost
of medications (direct materials) or nurse wages (direct labor)?
A. Sales budget
B. Direct materials budget
C. Manufacturing overhead budget
D. Production budget
CORRECT ANSWER: C
Rationale: The manufacturing (or in healthcare, service) overhead budget includes all
indirect production costs, such as supplies, utilities, depreciation, and indirect labor,
excluding direct materials and direct labor.
2. Which of the following is a common asset account on a hospital's balance sheet?
A. Accounts Payable
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B. Equity
C. Accounts Receivable
D. Utilities Expense
CORRECT ANSWER: C
Rationale: Accounts Receivable is an asset representing money owed to the hospital for
services provided. Accounts Payable is a liability, Equity is owner's interest, and Utilities
Expense is an income statement account.
3. On which financial statement would a nurse executive find the valuation of the
hospital's building, medical equipment, and current inventory?
A. Statement of Cash Flows
B. Balance Sheet
C. Income Statement
D. Statement of Retained Earnings
CORRECT ANSWER: B
Rationale: The Balance Sheet provides a snapshot of the organization's financial position
at a point in time, listing assets (what it owns), liabilities (what it owes), and equity.
4. What is the final step in the accounting cycle for a healthcare organization?
A. Summarize the effects of transactions
B. Analyze transactions
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C. Prepare reports (financial statements)
D. Record the effects of transactions
CORRECT ANSWER: C
Rationale: The final purpose of the accounting cycle is to produce financial reports (the
income statement, balance sheet, etc.) that summarize the organization's financial
activity for decision-makers.
5. Which of the following is not considered an accounting transaction?
A. Receive cash from a patient in payment of a bill.
B. Purchase a new patient monitor from a supplier.
C. Provide nursing services to a patient on credit.
D. Preparing the annual financial statements.
CORRECT ANSWER: D
Rationale: Preparing statements is an internal process, not a transactional exchange
between the entity and an external party. Transactions involve an exchange of value
that changes the financial position.
6. On which financial statement would a potential investor see if a hospital issued bonds
or paid dividends?
A. Statement of Cash Flows
B. Balance Sheet
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C. Income Statement
D. Statement of Retained Earnings
CORRECT ANSWER: A
Rationale: The Statement of Cash Flows shows cash inflows and outflows from
operating, investing, and financing activities. Issuing debt (borrowing) and paying
dividends are financing activities.
7. Whose job is it to ensure that investors are provided with full and fair information
about publicly traded healthcare companies?
A. Financial Accounting Standards Board (FASB)
B. American Institute of CPAs (AICPA)
C. International Accounting Standards Board (IASB)
D. Securities and Exchange Commission (SEC)
CORRECT ANSWER: D
Rationale: The SEC is the U.S. government agency responsible for protecting investors
and maintaining fair, orderly, and efficient markets by requiring full and fair financial
disclosure from public companies.
8. How does a classified balance sheet provide more useful information to a hospital
board member than an unclassified one?
A. It distinguishes between current assets (like cash) and long-term assets (like
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