WGU D196 COUNTDOWN TO THE OA: 300+ FINAL REVIEW QUESTIONS WITH VERIFIED SOLUTIONS | PRINCIPLES OF FINANCIAL AND MANAGERIAL ACCOUNTING OBJECTIVE ASSESSMENT 2025/2026 | WESTERN GOVERNORS UNIVERSITY

What would NOT be on the balance sheet?

Sales revenue

A company purchases a truck for cash. How does this transaction affect the company's accounting equation?

Asset increases; Asset decreases

For purposes of the Statement of Cash Flows, what is an investing activity?

Purchasing land

What type of account is Note Receivable?

Asset

On what financial statement do we see a company's expenses?

Income statement

What organization sets the official standards for the accounting profession in the U.S.?

FASB

What term is a revenue item?

Fee income

What statement best describes the purpose of the Balance sheet?

Balance sheet portrays the assets, liabilities, and owner's equity of a company as of a specific date.

Cash Flow Analysis

Total Cash Available:

October 317,000; November 291,000; December 267,500

Create a column chart that shows cash availability for each month from October through December. Label the Horizontal axis October-December. Title the chart Cash Available.

Cash Available

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Oct. Nov. Dec.

Why is the net cash flow for October lower than other months?

Cash dividends were paid in October.

Why is net cash flow higher in December even though sales are lower for this month?

Because the company did not have cash outflow for equipment or dividends.

On average cost of goods sold is 70% of sales. The company expects inventory levels to remain constant. This means that inventory levels are expected to equal the amount of costs of goods sold.

Forecasted Sales are $200,000 for November, $300,000 for December, and $300,000 for January. Sales forecasted for September are $200,000 and for October $300,000.

20% of purchases are cash and 80% are credit.

10% of credit purchases are paid in month of purchase, 60% in month following the purchase, and 30% in the second month following the purchase.

Calculate the forecasted cash payments for December.

176,400

What is the correct sequence of budgets for the master budget?

Sales, production, direct materials

In what budget should the depreciation of the factory buildings be included?

Overhead budget

What label is given to a business unit in which the manager is responsible for costs, revenues and assets?

Investment center

At the end of September, a company has finished goods inventory of 5,000 units. They have the desired amount of ending inventory of 2,000 units.

What additional information is nedded in order to compute budgeted production for October?

Projected sales volume for the period

What is a difference among service, manufacturing, and merchandising businesses?

Manufacturing businesses are involved in the production of goods, service businesses offer products, and merchandising businesses sell products that they purchase from suppliers.

What is the correct sequence for the flow of costs through the manufacturing production process?

Raw Materials Inventory to Work in Process Inventory to Finished Goods Inventory

What statement accurately differentiates period costs from product costs?

Product costs include expenses directly tied to the production of goods, such as direct materials, direct labor, manufacturing overhead while period costs are incurred over specific time periods and expensed in the period they are incurred.

A company sells 100,000 units for $13 per unit. Fixed costs are $350,000 and net income is $250,000. What should be reported as variable expenses in the CVP income statement?

700,000

Sales Revenue - Variable Costs - Fixed Costs = Net Income

Sales Revenue = 100,00 x $13 =$1,300,000

VC = X

1,300,000 - X - 350,000 = 250,000

950,000 - X = 250,000

-X = 250,000 - 950,000

X = 700,000

You can plug in the variable costs amount into the original CVP equation to check your answer -

$1,300,00 - $700,000 - $350,000 = $250,000

A company sells a product for $80 per unit. The variable cost per unit is $40, and total number of units sold of 3,500 and net income of $80,000. Calculate the break-even point in units.

1,500 units

Sales Revenue - Variable Costs - Fixed Costs = Net Income

Sales Revenue = 3,500 x $80 = $280,000

Variable cost = 3,500 x $40 = $140,000

FC = X

280,000 - 140,000 - X = 180,000

140,000 - X = 80,000

-X = 80,000 - 140,000

X = $60,000

You can plug in the variable costs amount into the original CVP equation to check your answer -

$280,00 - $140,000 - $60,000 = $80,000

Happy Cruising Company manufactures large cruise ships. What overhead allocation system should the company use?

Job order costing

What is a direct material cost for a company that manufactures airplanes?

Cost of aluminum that goes into the manufacturing of an airplane

Manufacturing overhead includes what costs?

All manufacturing costs that are not classified as either direct materials or direct labor

The CFO at Sunny Manufacturing has learned about activity-based costing (ABC). What is true about ABC?

ABC is a more accurate costing system than other traditional costing methods

What company would NOT use process costing?

A company that builds skyscrapers

What is true about job order costing?

As the product moves through the production system, accounting costs are assigned to the product