WGU D196 Exam Questions Correctly
Answered New Update
Accounting plays a vital role in the decision-making process. Which action is the first
step in the decision-making process? - Answer - ✔✔Identify the issue.
1/1
The money that a company needs to buy its land, pay its employees, and buy its
supplies is called capital. What are the potential sources of capital for a business? -
Answer - ✔✔Investors, creditors, and retained business earnings
Investors, creditors, and retained business earnings are all common sources of capital
for a business.
Which primary area of accounting generates reports for internal users? - Answer -
✔✔Management accounting generates reports for internal users, such as budgets and
cost analyses.
Which group uses financial information to evaluate whether a company will be able to
repay a loan? - Answer - ✔✔Lenders
Which of the primary financial statements reports the resources, obligations, and
owner's equity of a company? - Answer - ✔✔The balance sheet reports the resources of
a company (the assets), the company's obligations (the liabilities), and the owners'
equity, which represents the difference between what is owned (assets) and what is
owed (liabilities).
What is the role of the IASB in regulating accounting standards? - Answer -
✔✔Establish international accounting standards
The IASB establishes worldwide accounting standards. The IASB is a private
organization based in London. Currently, the IASB does not have legal authority to set
accounting standards for U.S. companies, although the SEC does allow the use of IASB
standards for non-U.S. companies with shares traded on U.S. stock exchanges. The
IASB is a standalone organization (overseen by a Board of Trustees); it is not under the
jurisdiction of the SEC, the European Union, the United Nations, or any other
governmental body. The IASB members represent a broad business constituency
including auditors, corporate accountants, analysts, and even accounting professors.
What group of people make up the FASB? - Answer - ✔✔People from a variety of
business-related backgrounds
What is the role of the GASB in setting accounting standards? - Answer - ✔✔The GASB
is a private-sector organization that establishes accounting and financial reporting
standards for U.S. state and local governments.
,In what way do accountants have an economic incentive to conduct themselves
ethically? - Answer - ✔✔The value of the information produced by accountants is
related to the confidence that users have in the reliability of that information.
How is it possible for an accountant to intentionally deceive financial statement users
and yet still technically be in compliance with generally accepted accounting principles
(GAAP)? - Answer - ✔✔There is flexibility inherent in the assumptions underlying the
preparation of financial statements.
Your boss approaches you with a concerning letter from the IRS and asks you to
explain the role of the IRS in regulating accounting standards. Based on the role of the
IRS, what could be the problem detailed in the letter? - Answer - ✔✔The company has
not filed its taxes in accordance with the law.
Anika is considering investing in a tech company that is known for developing smart
home appliances. Before investing, Anika first wants to ensure that the company's past
financial performance has been satisfactory and that the company manages its cash
flows well. What type of accounting information would provide this evidence for Anika? -
Answer - ✔✔Financial reports
Alliah Company just released its public accounting data for 20X9. Which user of
accounting information will monitor this data to ensure that the company is providing
sufficient information for investors? - Answer - ✔✔Government agencies
A new product line manager approaches the accounting department in order to
understand the past performance of the product line he has been asked to manage in
the future. Which role of accounting involves obtaining and using financial information to
determine the financial health and performance of a business or product line? - Answer
- ✔✔Evaluation
You read in the newspaper that a local company you are familiar with has been found
guilty in court of publishing financial statements that are false and misleading to users of
those financial statements. In this situation, what could the American Institute of
Certified Public Accountants (AICPA) do in response to the accountants who were
found guilty of unethical conduct in accounting practices? - Answer - ✔✔Implement
professional sanctions
What is the correct summary sequence in the accounting cycle? - Answer - ✔✔Analyze,
Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an
important part of the accounting process. From an accounting cycle standpoint, what is
purpose of business documents? - Answer - ✔✔To confirm that a transaction has
occurred
, What is the purpose of the financial accounting cycle? - Answer - ✔✔To turn
transactions into financial statements and provide useful financial information for
decision makers
What is a transaction in accounting? - Answer - ✔✔An interaction in which two parties
exchange something of value
In the context of the financial accounting cycle, what is the definition of an account? -
Answer - ✔✔A specific accounting record that provides an efficient way to categorize
similar types of transactions
What is an arm's-length transaction? - Answer - ✔✔An exchange between two
independent parties
Which event represents a transaction recorded as part of the financial accounting
cycle? - Answer - ✔✔The sale of a product for cash or on account
A company sells a product to a customer on account. Which part(s) of the accounting
equation does this particular transaction change? - Answer - ✔✔Both assets and
owners' equity
What is an example of an internal transaction? - Answer - ✔✔An employee is
transferred from one department to another.
Which item is a liability? - Answer - ✔✔Mortgage
After Oliver records each transaction, how should he ensure that the accounting
equation remains in balance? - Answer - ✔✔Add up the balances in all of the asset
accounts and compare them to the sum of all the liability and owners' equity accounts
What is the effect of borrowing money from the bank for the next accounting period on
the company's books? - Answer - ✔✔Cash (an asset) and a liability account both
increase.
One activity most businesses have in common is the acquisition of resources. Which
example is an external transaction where a business is acquiring a resource? - Answer -
✔✔Purchasing new equipment from a manufacturer
Which account is an example of an asset? - Answer - ✔✔Accounts receivable
Which statement describes the role of ethics in accounting? - Answer - ✔✔Accountants
have a moral incentive to conduct themselves ethically.
Answered New Update
Accounting plays a vital role in the decision-making process. Which action is the first
step in the decision-making process? - Answer - ✔✔Identify the issue.
1/1
The money that a company needs to buy its land, pay its employees, and buy its
supplies is called capital. What are the potential sources of capital for a business? -
Answer - ✔✔Investors, creditors, and retained business earnings
Investors, creditors, and retained business earnings are all common sources of capital
for a business.
Which primary area of accounting generates reports for internal users? - Answer -
✔✔Management accounting generates reports for internal users, such as budgets and
cost analyses.
Which group uses financial information to evaluate whether a company will be able to
repay a loan? - Answer - ✔✔Lenders
Which of the primary financial statements reports the resources, obligations, and
owner's equity of a company? - Answer - ✔✔The balance sheet reports the resources of
a company (the assets), the company's obligations (the liabilities), and the owners'
equity, which represents the difference between what is owned (assets) and what is
owed (liabilities).
What is the role of the IASB in regulating accounting standards? - Answer -
✔✔Establish international accounting standards
The IASB establishes worldwide accounting standards. The IASB is a private
organization based in London. Currently, the IASB does not have legal authority to set
accounting standards for U.S. companies, although the SEC does allow the use of IASB
standards for non-U.S. companies with shares traded on U.S. stock exchanges. The
IASB is a standalone organization (overseen by a Board of Trustees); it is not under the
jurisdiction of the SEC, the European Union, the United Nations, or any other
governmental body. The IASB members represent a broad business constituency
including auditors, corporate accountants, analysts, and even accounting professors.
What group of people make up the FASB? - Answer - ✔✔People from a variety of
business-related backgrounds
What is the role of the GASB in setting accounting standards? - Answer - ✔✔The GASB
is a private-sector organization that establishes accounting and financial reporting
standards for U.S. state and local governments.
,In what way do accountants have an economic incentive to conduct themselves
ethically? - Answer - ✔✔The value of the information produced by accountants is
related to the confidence that users have in the reliability of that information.
How is it possible for an accountant to intentionally deceive financial statement users
and yet still technically be in compliance with generally accepted accounting principles
(GAAP)? - Answer - ✔✔There is flexibility inherent in the assumptions underlying the
preparation of financial statements.
Your boss approaches you with a concerning letter from the IRS and asks you to
explain the role of the IRS in regulating accounting standards. Based on the role of the
IRS, what could be the problem detailed in the letter? - Answer - ✔✔The company has
not filed its taxes in accordance with the law.
Anika is considering investing in a tech company that is known for developing smart
home appliances. Before investing, Anika first wants to ensure that the company's past
financial performance has been satisfactory and that the company manages its cash
flows well. What type of accounting information would provide this evidence for Anika? -
Answer - ✔✔Financial reports
Alliah Company just released its public accounting data for 20X9. Which user of
accounting information will monitor this data to ensure that the company is providing
sufficient information for investors? - Answer - ✔✔Government agencies
A new product line manager approaches the accounting department in order to
understand the past performance of the product line he has been asked to manage in
the future. Which role of accounting involves obtaining and using financial information to
determine the financial health and performance of a business or product line? - Answer
- ✔✔Evaluation
You read in the newspaper that a local company you are familiar with has been found
guilty in court of publishing financial statements that are false and misleading to users of
those financial statements. In this situation, what could the American Institute of
Certified Public Accountants (AICPA) do in response to the accountants who were
found guilty of unethical conduct in accounting practices? - Answer - ✔✔Implement
professional sanctions
What is the correct summary sequence in the accounting cycle? - Answer - ✔✔Analyze,
Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an
important part of the accounting process. From an accounting cycle standpoint, what is
purpose of business documents? - Answer - ✔✔To confirm that a transaction has
occurred
, What is the purpose of the financial accounting cycle? - Answer - ✔✔To turn
transactions into financial statements and provide useful financial information for
decision makers
What is a transaction in accounting? - Answer - ✔✔An interaction in which two parties
exchange something of value
In the context of the financial accounting cycle, what is the definition of an account? -
Answer - ✔✔A specific accounting record that provides an efficient way to categorize
similar types of transactions
What is an arm's-length transaction? - Answer - ✔✔An exchange between two
independent parties
Which event represents a transaction recorded as part of the financial accounting
cycle? - Answer - ✔✔The sale of a product for cash or on account
A company sells a product to a customer on account. Which part(s) of the accounting
equation does this particular transaction change? - Answer - ✔✔Both assets and
owners' equity
What is an example of an internal transaction? - Answer - ✔✔An employee is
transferred from one department to another.
Which item is a liability? - Answer - ✔✔Mortgage
After Oliver records each transaction, how should he ensure that the accounting
equation remains in balance? - Answer - ✔✔Add up the balances in all of the asset
accounts and compare them to the sum of all the liability and owners' equity accounts
What is the effect of borrowing money from the bank for the next accounting period on
the company's books? - Answer - ✔✔Cash (an asset) and a liability account both
increase.
One activity most businesses have in common is the acquisition of resources. Which
example is an external transaction where a business is acquiring a resource? - Answer -
✔✔Purchasing new equipment from a manufacturer
Which account is an example of an asset? - Answer - ✔✔Accounts receivable
Which statement describes the role of ethics in accounting? - Answer - ✔✔Accountants
have a moral incentive to conduct themselves ethically.
