WGU D196 UPDATED ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE
◉ What is the effect of a company's accounting department
maintaining high ethical standards?
The company can hire fewer accountants to do the same amount of
work.
The company can report more favorable results in its financial
statements.
The company's accounting information will increase in value.
The company's accounting information will decrease in value.
Answer: 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 used to record long term liabilities.
Financial statement data are often used in determining employee
bonuses.
Financial statement data provide item-by-item product cost
information.
,Financial statement data provide detailed internal budget
information.
Answer: Financial statement data are often used in determining
employee bonuses.
◉ Which group establishes financial accounting rules in the United
States?
Internal Revenue Service (IRS)
Financial Accounting Standards Board (FASB)
International Accounting Standards Board (IASB)
American Institute of Certified Public Accountants (AICPA)
Answer: Financial Accounting Standards Board (FASB)
◉ Which report is one of the three primary financial statements?
Statement of management accounting
Statement of the accounting cycle
Statement of stakeholder funds
Statement of cash flows
Answer: 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; liabilities increase by $5,000.
Assets increase by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; revenues increase by $5,000.
Answer: Assets decrease by $5,000; expenses increase by $5,000.
◉ What is a transaction?
Two parties exchanging something of value
A type of commonly used accounting software
A category of merchandiser or retailer
An example of an online business document
Answer: 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?
Assets increase by $80,000; liabilities increase by $80,000.
Assets increase by $80,000; owners' equity increases by $80,000.
Assets increase by $80,000; liabilities decrease by $80,000.
Assets increase by $80,000; revenues increase by $80,000.
Answer: Assets increase by $80,000; liabilities increase by $80,000.
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE
◉ What is the effect of a company's accounting department
maintaining high ethical standards?
The company can hire fewer accountants to do the same amount of
work.
The company can report more favorable results in its financial
statements.
The company's accounting information will increase in value.
The company's accounting information will decrease in value.
Answer: 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 used to record long term liabilities.
Financial statement data are often used in determining employee
bonuses.
Financial statement data provide item-by-item product cost
information.
,Financial statement data provide detailed internal budget
information.
Answer: Financial statement data are often used in determining
employee bonuses.
◉ Which group establishes financial accounting rules in the United
States?
Internal Revenue Service (IRS)
Financial Accounting Standards Board (FASB)
International Accounting Standards Board (IASB)
American Institute of Certified Public Accountants (AICPA)
Answer: Financial Accounting Standards Board (FASB)
◉ Which report is one of the three primary financial statements?
Statement of management accounting
Statement of the accounting cycle
Statement of stakeholder funds
Statement of cash flows
Answer: 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; liabilities increase by $5,000.
Assets increase by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; expenses increase by $5,000.
Assets decrease by $5,000; revenues increase by $5,000.
Answer: Assets decrease by $5,000; expenses increase by $5,000.
◉ What is a transaction?
Two parties exchanging something of value
A type of commonly used accounting software
A category of merchandiser or retailer
An example of an online business document
Answer: 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?
Assets increase by $80,000; liabilities increase by $80,000.
Assets increase by $80,000; owners' equity increases by $80,000.
Assets increase by $80,000; liabilities decrease by $80,000.
Assets increase by $80,000; revenues increase by $80,000.
Answer: Assets increase by $80,000; liabilities increase by $80,000.
