WGU d196 Top Exam Questions and answers, latest Version.Verified.

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WGU d196 Top Exam Questions and answers, latest Version.Verified. What is a transaction? - ✔✔-Two parties exchanging something of value 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 (FASB) Which report is one of the three primary financial statements? - ✔✔-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? - ✔✔-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? - ✔✔-Assets decrease by $5,000; expenses increase by $5,000. 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 Which item is an expense item? - ✔✔-Cost of goods sold How is gross profit computed? - ✔✔-Sales minus cost of goods sold Which type of account is retained earnings? - ✔✔-Equity For purposes of cash flow classification in the statement of cash flows, which item is an operating activity? - ✔✔-Paying employees How does a classified balance sheet provide useful information to a decision maker? - ✔✔-It distinguishes between current and long-term assets. What information does a balance sheet provide to a decision maker? - ✔✔-Summary of the financial position of a company at a particular date What is an account payable? - ✔✔-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? - ✔✔-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? - ✔✔-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? - ✔✔-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? - ✔✔-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? - ✔✔-Increased hiring, training, and overtime costs What does a manager have control over in a cost center? - ✔✔-Costs What should be considered when developing a measure to evaluate the performance of a manager? - ✔✔-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? - ✔✔-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? - ✔✔-Administrative expense budget Which items are uncontrollable, external variables that make it difficult to forecast the level of sales? - ✔✔-Customer tastes and economic conditions What is the correct sequence of budgets in a manufacturing business? - ✔✔-Sales, production, direct materials Which type of business organization has a major focus on direct materials, direct labor, and overhead? - ✔✔-Manufacturing What are the three primary functions that company managers use managerial accounting information for? - ✔✔-Planning, controlling, and evaluating What is the proper accounting for a product cost? - ✔✔-Record as an inventory cost until the item is sold How could a period cost be reported in an income statement? - ✔✔-As an administrative expense A retail company purchased inventory costing $100,000. By the end of the year, inventory costing $75,000 had been sold. How is the remaining $25,000 in inventory reported in the financial statements? - ✔✔-As an asset in the balance sheet How are the wages of cashiers classified in a merchandising company? - ✔✔-Selling expense How are wages of office staff in a company headquarters building classified? - ✔✔-Administrative expense Which label is given to the cost of the wood used in the construction of a piece of wooden furniture? - ✔✔-Direct materials Which label is given to the cost of electricity in a furniture factory? - ✔✔-Manufacturing overhead What is the sequence of the flow of costs through a manufacturing operation? - ✔✔-Raw materials, work-in-process, finished goods, cost of goods sold What is the CVP equation? - ✔✔-Sales - variable [Show More]

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