WGU D196 Pre-Assessment EXAM 50
QUESTIONS AND CORRECT DETAILED
ANSWERWERS |ALREAD
What is the effect of a company's accounting department maintaining high ethical
standards? - ✔✔✔-The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information? - ✔✔✔-Financial statement data are often used in determining
employee bonuses.
Which group establishes financial accounting rules in the United States? - ✔✔✔-
Financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements? - ✔✔✔-Statement
of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation? -
✔✔✔-Assets decrease by $5,000; expenses increase by $5,000.
, What is a transaction? - ✔✔✔-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? - ✔✔✔-Expenses decrease owners' equity.
What is the impact of expenses on the accounting equation? - ✔✔✔-Expenses
decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
- ✔✔✔-Liability
What is the purpose of the financial accounting cycle? - ✔✔✔-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? - ✔✔✔-Assets
Which item is an expense item? - ✔✔✔-Cost of goods sold
How is gross profit computed? - ✔✔✔-Sales minus cost of goods sold
Which type of account is retained earnings? - ✔✔✔-Equity
QUESTIONS AND CORRECT DETAILED
ANSWERWERS |ALREAD
What is the effect of a company's accounting department maintaining high ethical
standards? - ✔✔✔-The company's accounting information will increase in value.
Why might employees be interested in their company's financial accounting
information? - ✔✔✔-Financial statement data are often used in determining
employee bonuses.
Which group establishes financial accounting rules in the United States? - ✔✔✔-
Financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements? - ✔✔✔-Statement
of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation? -
✔✔✔-Assets decrease by $5,000; expenses increase by $5,000.
, What is a transaction? - ✔✔✔-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? - ✔✔✔-Expenses decrease owners' equity.
What is the impact of expenses on the accounting equation? - ✔✔✔-Expenses
decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of?
- ✔✔✔-Liability
What is the purpose of the financial accounting cycle? - ✔✔✔-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? - ✔✔✔-Assets
Which item is an expense item? - ✔✔✔-Cost of goods sold
How is gross profit computed? - ✔✔✔-Sales minus cost of goods sold
Which type of account is retained earnings? - ✔✔✔-Equity
