WGU D774 - POLO PRE-ASSESSMENT EXAM QUESTIONS AND ANSWERS
1. A publicly traded company is preparing to issue stock to its
investors. As part of the process, the company must submit
financial disclosures and filings to the Regulatory agency
overseeing securities markets which federal agency is
responsible for this regulation?
A. Department of Commerce
B. Federal Reserve System
C. Internal Revenue Service (IRS)
D. Securities and Exchange Commission (SEC): D. Securites and
Exchange Commision.
2. Which organization is an independent, nonprofit entity
responsible for setting financial accounting and reporting
standards for public and private sector businesses in the United
States that use generally accepted accounting principles. (GAAP)?
A. Center for Audit Quality (CAQ)
B. Financial Accounting Standards Board (FASB)
,C. Internal Revenue Service (IRS)
D. Government Accountability Office (GAO: B. Financial Accounting
Standards Board (FASB)
3. What is the purpose of the Public Company Accounting
Oversight Board? ( PCAOB)
A. It establishes financial reporting standards for nonprofit
organizations.
B. It monitors compliance with tax regulations for large
organizations.
C. It oversees the audits of public companies to protect investors.
D. It provides guidance for mergers and acquisitions in financial
markets.: C. It oversees the audits of public companies to protect investors.
4. A multinational corporation wants to hire an audit firm with
extensive expe-rience in financial statement auditing for
publicly traded companies. Which type of firm would be the
most suitable choice?
A. Big Four
B. Big Seven
,C. COSO-certified firm
D. CMA-certified firm: A. Big Four
5. What's accounting formula does the income statement
represent?
A. Beginning retained earnings + net income - dividends.
B. Beginning net income - dividends
C. Current assets - current liabilities
D. Revenues - Expenses: D. Revenues - Expenses
6. What does the company's operating expense on the income
statement represent?
A. The other expenses that are incurred which are not due to the
company's day-to-day operations.
B. The day-to-day operational costs not associated with the direct
selling and products or services.
C. The expenses incurred by the company for goods that
are sold to its customers.
D. The expenses incurred to sell a fixed asset once the fixed asset
has reached its end of life.: B. The day-to-day operational costs are not
associated with the direct selling of products or services.
7. A business pays rent for its office space. Which is reported as an
expense on its income statement. Which category includes this
expense?
A. Costs of goods sold
B. General and administrative expenses
C. Non-operating expenses
D. Selling Expenses: B. General and administrative expenses
, 8. Which financial statement reports the profit or loss using the
accrual basis of accounting?
A. Bank Reconciliation
B. Balance sheet
C. Income statement
D. Statement of cash flows: C. Income statement
1. A publicly traded company is preparing to issue stock to its
investors. As part of the process, the company must submit
financial disclosures and filings to the Regulatory agency
overseeing securities markets which federal agency is
responsible for this regulation?
A. Department of Commerce
B. Federal Reserve System
C. Internal Revenue Service (IRS)
D. Securities and Exchange Commission (SEC): D. Securites and
Exchange Commision.
2. Which organization is an independent, nonprofit entity
responsible for setting financial accounting and reporting
standards for public and private sector businesses in the United
States that use generally accepted accounting principles. (GAAP)?
A. Center for Audit Quality (CAQ)
B. Financial Accounting Standards Board (FASB)
,C. Internal Revenue Service (IRS)
D. Government Accountability Office (GAO: B. Financial Accounting
Standards Board (FASB)
3. What is the purpose of the Public Company Accounting
Oversight Board? ( PCAOB)
A. It establishes financial reporting standards for nonprofit
organizations.
B. It monitors compliance with tax regulations for large
organizations.
C. It oversees the audits of public companies to protect investors.
D. It provides guidance for mergers and acquisitions in financial
markets.: C. It oversees the audits of public companies to protect investors.
4. A multinational corporation wants to hire an audit firm with
extensive expe-rience in financial statement auditing for
publicly traded companies. Which type of firm would be the
most suitable choice?
A. Big Four
B. Big Seven
,C. COSO-certified firm
D. CMA-certified firm: A. Big Four
5. What's accounting formula does the income statement
represent?
A. Beginning retained earnings + net income - dividends.
B. Beginning net income - dividends
C. Current assets - current liabilities
D. Revenues - Expenses: D. Revenues - Expenses
6. What does the company's operating expense on the income
statement represent?
A. The other expenses that are incurred which are not due to the
company's day-to-day operations.
B. The day-to-day operational costs not associated with the direct
selling and products or services.
C. The expenses incurred by the company for goods that
are sold to its customers.
D. The expenses incurred to sell a fixed asset once the fixed asset
has reached its end of life.: B. The day-to-day operational costs are not
associated with the direct selling of products or services.
7. A business pays rent for its office space. Which is reported as an
expense on its income statement. Which category includes this
expense?
A. Costs of goods sold
B. General and administrative expenses
C. Non-operating expenses
D. Selling Expenses: B. General and administrative expenses
, 8. Which financial statement reports the profit or loss using the
accrual basis of accounting?
A. Bank Reconciliation
B. Balance sheet
C. Income statement
D. Statement of cash flows: C. Income statement
