WGU D196 Exam Practice Questions
What is the effect of a company's accounting department maintaining high ethical standards? -
✔✔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 often used in determining employee bonuses.
Which group establishes financial accounting rules in the United States? - ✔✔Financial accounting
standards board
Which report is one of the three primary financial statements? - ✔✔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
What is a transaction? - ✔✔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.
What is the impact of expenses on the accounting equation? - ✔✔Expenses decrease owners' equity.
Which type of account are accounts payable and notes payable both examples of? - ✔✔Liability
What is the purpose of the financial accounting cycle? - ✔✔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? - ✔✔Assets
