WGU D774 INTRO TO BUSINESS
ACCOUNTING COMPREHENSIVE EXAM
STUDY GUIDE COMPLETE QUESTIONS AND
SOLUTIONS
●● What do internal auditors do?
Answer: Enhance financial integrity by evaluating internal controls and
proactively identifying weaknesses
●● What was an effect of the Sarbanes-Oxley Act?
Answer: Strengthened auditor independence and corporate
accountability.
●● Purpose of the Sarbanes-Oxley Act?
Answer: Improve financial transparency and reduce corporate fraud.
●● Simple difference between financial and managerial accounting?
Answer: Financial accounting focuses on external reporting while
managerial accounting focuses on internal decision-making.
●● Does managerial accounting need to comply with GAAP?
Answer: No
,●● Celebrities that have an accounting degree
Answer: Janet Jackson, John Grisham, Simu Liu, & D'Lo Brown
●● Which organization is responsible for creating and issuing the
financial accounting standards that form the foundation of generally
accepted accounting principles (GAAP) in the United States?
Answer: (FASB) Financial Accounting Standards Board
●● How often are external financial accounting reports typically
published for stakeholders, such as investors and regulators?
Answer: Quarterly or Annually
●● Which regulation requires the certification and documentation of
internal controls, including an auditor's issuance of an internal report
after evaluating those controls?
Answer: Sarbanes-Oxley Act
●● Who was the father of accounting?
Answer: Luca Pacioli
●● Formula for Net Income
Answer: Revenue - Expenses
, ●● Accrual Accounting is a method that...
Answer: Records revenues when earned and expenses when incurred,
regardless of when cash changes hands
●● Cash basis accounting is a method that...
Answer: Records revenues WHEN cash is received and expenses
WHEN cash is paid, ignoring WHEN the money was earned or the
service was provided
●● Purpose of the income statement?
Answer: Report a company's revenues and expenses over a period of
time
●● 5 core components of an income statement
Answer: Revenue, expenses, gains, losses, and net income.
●● Income statement is also called?
Answer: Profit & loss statement
●● What is the statement of owner's equity?
Answer: Shows how the equity (or value) of the organization has
changed over time
ACCOUNTING COMPREHENSIVE EXAM
STUDY GUIDE COMPLETE QUESTIONS AND
SOLUTIONS
●● What do internal auditors do?
Answer: Enhance financial integrity by evaluating internal controls and
proactively identifying weaknesses
●● What was an effect of the Sarbanes-Oxley Act?
Answer: Strengthened auditor independence and corporate
accountability.
●● Purpose of the Sarbanes-Oxley Act?
Answer: Improve financial transparency and reduce corporate fraud.
●● Simple difference between financial and managerial accounting?
Answer: Financial accounting focuses on external reporting while
managerial accounting focuses on internal decision-making.
●● Does managerial accounting need to comply with GAAP?
Answer: No
,●● Celebrities that have an accounting degree
Answer: Janet Jackson, John Grisham, Simu Liu, & D'Lo Brown
●● Which organization is responsible for creating and issuing the
financial accounting standards that form the foundation of generally
accepted accounting principles (GAAP) in the United States?
Answer: (FASB) Financial Accounting Standards Board
●● How often are external financial accounting reports typically
published for stakeholders, such as investors and regulators?
Answer: Quarterly or Annually
●● Which regulation requires the certification and documentation of
internal controls, including an auditor's issuance of an internal report
after evaluating those controls?
Answer: Sarbanes-Oxley Act
●● Who was the father of accounting?
Answer: Luca Pacioli
●● Formula for Net Income
Answer: Revenue - Expenses
, ●● Accrual Accounting is a method that...
Answer: Records revenues when earned and expenses when incurred,
regardless of when cash changes hands
●● Cash basis accounting is a method that...
Answer: Records revenues WHEN cash is received and expenses
WHEN cash is paid, ignoring WHEN the money was earned or the
service was provided
●● Purpose of the income statement?
Answer: Report a company's revenues and expenses over a period of
time
●● 5 core components of an income statement
Answer: Revenue, expenses, gains, losses, and net income.
●● Income statement is also called?
Answer: Profit & loss statement
●● What is the statement of owner's equity?
Answer: Shows how the equity (or value) of the organization has
changed over time
