WGU D196 Pre-Assessment Questions and Answers with Verified Solutions

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WGU D196 Pre-Assessment Questions and Answers with Verified Solutions What is the effect of a company's accounting department maintaining high ethical standards? -The company can report more favora... ble results in its financial statements. -The company's accounting information will decrease in value. -The company can hire fewer accountants to do the same amount of work. -The company's accounting information will increase in value. ✔✔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 provide detailed internal budget information. -Financial statement data are often used in determining employee bonuses. -Financial statement data provide item-by-item product cost information. ✔✔Financial statement data are often used in determining employee bonuses. Which group establishes financial accounting rules in the United States? -Internal Revenue Service (IRS) -American Institute of Certified Public Accountants (AICPA) -Financial Accounting Standards Board (FASB) -International Accounting Standards Board (IASB) ✔✔Financial Accounting Standards Board (FASB) Which report is one of the three primary financial statements? -Statement of stakeholder funds -Statement of cash flows -Statement of the accounting cycle -Statement of management accounting ✔✔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. -Assets decrease by $5,000; liabilities increase by $5,000. -Assets decrease by $5,000; revenues increase by $5,000. -Assets increase by $5,000; expenses increase by $5,000. ✔✔Assets decrease by $5,000; expenses increase by $5,000. What is a transaction? -Two parties exchanging something of value -An example of an online business document -A type of commonly used accounting software -A category of merchandiser or retailer ✔✔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. -Expenses increase liabilities. -Expenses decrease liabilities. -Expenses increase owners' equity. ✔✔Expenses decrease owners' equity. What is the impact of expenses on the accounting equation? -Expenses decrease owners' equity. -Expenses increase liabilities. -Expenses decrease liabilities. -Expenses increase owners' equity. ✔✔Expenses decrease owners' equity. Which type of account are accounts payable and notes payable both examples of? -Asset -Equity -Expense -Liability ✔✔Liability What is the purpose of the financial accounting cycle? -To turn information about transactions into financial statements -To gather information related to the expenses and income generated by a company -To produce and analyze a company's monthly bank statement -To collect confidential information for management to use as a competitive tool ✔✔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 [Show More]

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