D196 Exam 100% Solved Correct 2025
New Update
What type of account are accounts payable and notes payable both examples of? -
Answers -✔✔ Liability
What is the purpose of the financial accounting cycle? - Answers -✔✔ 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? - Answers -✔✔ Assets
What is the effect of a company's accounting department maintaining high ethical
standards? - Answers -✔✔ The Company’s accounting information will increase in value
Why would employees be interested in their company's financial accounting
information? - Answers -✔✔ financial statement data are often used in determining
employee bonuses.
What group establishes financial accounting rules in the United States? - Answers -✔✔
Financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements? - Answers -✔✔
Statement of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation? - Answers
-✔✔ Assets decrease by $5,000; expenses increase by $5,000.
What is a transaction? - Answers -✔✔ 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? -
Answers -✔✔ Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation? - Answers -✔✔ Expenses
decrease owner's equity.
What is an expense item? - Answers -✔✔ Cost of goods sold
How is gross profit computed? - Answers -✔✔ Sales minus cost of goods sold
, What type of account is retained earnings? - Answers -✔✔ Equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity? - Answers -✔✔ Paying employees
How does a classified balance sheet provide useful information to a decision maker? -
Answers -✔✔ It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker? - Answers -✔✔
Summary of the financial position of a company at a particular date
What is an account payable? - Answers -✔✔ The amount owed by a company that
purchased goods or services from a supplier on credit
What is an example of a financial cost that would result from poor direct labor budgeting
and planning? - Answers -✔✔ Increased hiring, training, and overtime costs
What does a manager have control over in a cost center? - Answers -✔✔ Costs
What should be considered when developing a measure to evaluate the performance of
a manager? - Answers -✔✔ Only controllable costs
In some companies, the performance measures for profit center managers are heavily
influenced by cost allocations downward from organizational units (such as company
headquarters).
Why is this a mistake? - Answers -✔✔ Uncontrollable costs should not be included in
the performance evaluation measure of a profit center manager
Which budget should include the expected cost of supplies used by the office staff of
the corporate headquarters? - Answers -✔✔ Administrative expense budget
Which items are uncontrollable, external variables that make it difficult to forecast the
level of sales? - Answers -✔✔ Customer tastes and economic conditions
What is the correct sequence of budgets in a manufacturing business? - Answers -✔✔
Sales, production, direct materials
Which type of business organization has a major focus on direct materials, direct labor,
and overhead? - Answers -✔✔ Manufacturing
What are the three primary functions that company managers use managerial
accounting for? - Answers -✔✔ Planning, controlling, and evaluating
New Update
What type of account are accounts payable and notes payable both examples of? -
Answers -✔✔ Liability
What is the purpose of the financial accounting cycle? - Answers -✔✔ 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? - Answers -✔✔ Assets
What is the effect of a company's accounting department maintaining high ethical
standards? - Answers -✔✔ The Company’s accounting information will increase in value
Why would employees be interested in their company's financial accounting
information? - Answers -✔✔ financial statement data are often used in determining
employee bonuses.
What group establishes financial accounting rules in the United States? - Answers -✔✔
Financial Accounting Standards Board (FASB)
Which report is one of the three primary financial statements? - Answers -✔✔
Statement of cash flows
A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation? - Answers
-✔✔ Assets decrease by $5,000; expenses increase by $5,000.
What is a transaction? - Answers -✔✔ 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? -
Answers -✔✔ Assets increase by $80,000; liabilities increase by $80,000.
What is the impact of expenses on the accounting equation? - Answers -✔✔ Expenses
decrease owner's equity.
What is an expense item? - Answers -✔✔ Cost of goods sold
How is gross profit computed? - Answers -✔✔ Sales minus cost of goods sold
, What type of account is retained earnings? - Answers -✔✔ Equity
For purposes of cash flow classification in the statement of cash flows, which item is an
operating activity? - Answers -✔✔ Paying employees
How does a classified balance sheet provide useful information to a decision maker? -
Answers -✔✔ It distinguishes between current and long-term assets.
What information does a balance sheet provide to a decision maker? - Answers -✔✔
Summary of the financial position of a company at a particular date
What is an account payable? - Answers -✔✔ The amount owed by a company that
purchased goods or services from a supplier on credit
What is an example of a financial cost that would result from poor direct labor budgeting
and planning? - Answers -✔✔ Increased hiring, training, and overtime costs
What does a manager have control over in a cost center? - Answers -✔✔ Costs
What should be considered when developing a measure to evaluate the performance of
a manager? - Answers -✔✔ Only controllable costs
In some companies, the performance measures for profit center managers are heavily
influenced by cost allocations downward from organizational units (such as company
headquarters).
Why is this a mistake? - Answers -✔✔ Uncontrollable costs should not be included in
the performance evaluation measure of a profit center manager
Which budget should include the expected cost of supplies used by the office staff of
the corporate headquarters? - Answers -✔✔ Administrative expense budget
Which items are uncontrollable, external variables that make it difficult to forecast the
level of sales? - Answers -✔✔ Customer tastes and economic conditions
What is the correct sequence of budgets in a manufacturing business? - Answers -✔✔
Sales, production, direct materials
Which type of business organization has a major focus on direct materials, direct labor,
and overhead? - Answers -✔✔ Manufacturing
What are the three primary functions that company managers use managerial
accounting for? - Answers -✔✔ Planning, controlling, and evaluating
