WGU d196 Exam Rated A+ (verified)
Which report is one of the three primary financial statements? - Answers -✔✔ Assets
decrease by $5,000; expenses increase by $5,000
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.
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 the impact of expenses on the accounting equation? - Answers -✔✔ Expenses
decrease owners' equity.
Why might employees be interested in their company's financial accounting
information? - Answers -✔✔ financial statement data are often used in determining
employee bonuses.
What is a transaction? - Answers -✔✔ two parties exchanging something of value
What is the effect of a company's accounting department maintaining high ethical
standards? - Answers -✔✔ The Company’s accounting information will increase in
value.
Which group establishes financial accounting rules in the United States? - Answers -✔✔
financial Accounting Standards Board (FASB)
Which 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
Which item is an expense item? - Answers -✔✔ Cost of goods sold
How is gross profit computed? - Answers -✔✔ Sales minus cost of goods sold
, Which 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
Based on your analysis, what should management be concerned about? - Answers -✔✔
The increase in operating expenses over the past two years
Which action would make the profitability of the company in 20X9 the same as in 20X7?
- Answers -✔✔ Increasing the proportion of gross profit to sales by about 2%
Why is the net cash for December negative while total sales for December are the
highest out of the months from October through December? - Answers -✔✔ Total cash
available does not reflect December sales because there was a high volume of credit
sales.
How can Whole Pine avoid having negative net cash flows in December? - Answers -
✔✔ Postpone purchasing the new equipment and do not pay cash dividends to
shareholders.
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 report is one of the three primary financial statements? - Answers -✔✔ Assets
decrease by $5,000; expenses increase by $5,000
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.
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 the impact of expenses on the accounting equation? - Answers -✔✔ Expenses
decrease owners' equity.
Why might employees be interested in their company's financial accounting
information? - Answers -✔✔ financial statement data are often used in determining
employee bonuses.
What is a transaction? - Answers -✔✔ two parties exchanging something of value
What is the effect of a company's accounting department maintaining high ethical
standards? - Answers -✔✔ The Company’s accounting information will increase in
value.
Which group establishes financial accounting rules in the United States? - Answers -✔✔
financial Accounting Standards Board (FASB)
Which 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
Which item is an expense item? - Answers -✔✔ Cost of goods sold
How is gross profit computed? - Answers -✔✔ Sales minus cost of goods sold
, Which 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
Based on your analysis, what should management be concerned about? - Answers -✔✔
The increase in operating expenses over the past two years
Which action would make the profitability of the company in 20X9 the same as in 20X7?
- Answers -✔✔ Increasing the proportion of gross profit to sales by about 2%
Why is the net cash for December negative while total sales for December are the
highest out of the months from October through December? - Answers -✔✔ Total cash
available does not reflect December sales because there was a high volume of credit
sales.
How can Whole Pine avoid having negative net cash flows in December? - Answers -
✔✔ Postpone purchasing the new equipment and do not pay cash dividends to
shareholders.
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.
