D102 FINANCIAL ACCOUNTING WGU
EXAM QUESTIONS & UPDATED
ANSWERS RATED 100% CORRECT
What information is contained in a balance sheet? - Correct Answer ✔✔ Report of a
company's financial position as of a point in time.
What is an owners' equity item?
Accounts receivable
Loans payable
Capital stock
Cash - Correct Answer ✔✔ Capital Stock
A company ended July with assets of $150,000 and owner's equity of $60,000.
What is the amount of liabilities at the end of July? - Correct Answer ✔✔ $90,000
What is reported in a multiple-step income statement that is not reported in a single-step
income statement? - Correct Answer ✔✔ Gross Profit
How is gross profit computed? - Correct Answer ✔✔ Sales minus cost of goods sold.
The following are some accounts from a company's financial statements:
(accounts receivable, cost of goods sold, cash, retained earnings, sales, inventory,
income tax expense, accounts payable)
Which set is a list of all of the items that are used in computing this company's net
income? - Correct Answer ✔✔ Sales, cost of goods sold, and income tax expense.
What cash flow category contains activities whereby cash is obtained from or repaid to
owners or creditors? - Correct Answer ✔✔ Financing
Here are some financial statement items for the year for a company.
Cash received from customers
Cash received from the sale of land
Cash paid for dividends
Cash paid to employees for wages
Cash paid to purchase a new building
Cash paid for rent
Cash received as new investment from owners
Which set of items is a list of items that are used in computing the company's financing
cash flow for the year? - Correct Answer ✔✔ Cash paid for dividends and cash received
as new investment from owners.
, Here are some financial statement items for a company.
Net income
Cash flow from financing activities
Cash balance at the beginning of the year
Sales Cash flow from investing activities
Accounts receivable
Retained earnings at the beginning of the year
Cash flow from operating activities
What items are used in computing the company's ending cash balance for the year? -
Correct Answer ✔✔ Cash balance at the beginning of the year, cash flow from
operating activities, cash flow from investing activities, and cash flow from financing
activities.
How is revenue typically recorded with debits and credits? - Correct Answer ✔✔ As a
credit, representing an increase in equity.
What is the proper way to record an increase in an asset account and an increase in an
equity account? - Correct Answer ✔✔ Asset, debit; equity, credit
How are expenses typically recorded with debits and credits? - Correct Answer ✔✔ As
a debit, representing an increase in assets.
A company purchased inventory for $5,000. The company paid $1,000 cash and the
remainder of the purchase was made on account.
What is included in the journal entry necessary to record this inventory purchase? -
Correct Answer ✔✔ Credit to accounts payable for $4,000.
A company sold inventory that cost $1,300 for $2,000. It received $500 cash and the
remainder was on account.
What is included in the journal entry or entries necessary to record this sale of
inventory? - Correct Answer ✔✔ Debit to accounts receivable for $1,500.
On August 1 of Year 1, a company paid $7,200 for two years' rent. The rental period
starts on August 1 of Year 1.
Which debit or credit is correctly included in the adjusting journal entry necessary on
December 31 of Year 1? - Correct Answer ✔✔ Debit to rent expense for $1,500.
The revenue recognition principle states that revenues are recorded when two main
criteria have been met. One of those criteria is that cash has been collected or
collectability is reasonably assured.
What is the other criterion? - Correct Answer ✔✔ The earnings process is substantially
complete.
What is the matching principle? - Correct Answer ✔✔ Expenses are recorded in the
same period in which the corresponding revenue is recorded.
EXAM QUESTIONS & UPDATED
ANSWERS RATED 100% CORRECT
What information is contained in a balance sheet? - Correct Answer ✔✔ Report of a
company's financial position as of a point in time.
What is an owners' equity item?
Accounts receivable
Loans payable
Capital stock
Cash - Correct Answer ✔✔ Capital Stock
A company ended July with assets of $150,000 and owner's equity of $60,000.
What is the amount of liabilities at the end of July? - Correct Answer ✔✔ $90,000
What is reported in a multiple-step income statement that is not reported in a single-step
income statement? - Correct Answer ✔✔ Gross Profit
How is gross profit computed? - Correct Answer ✔✔ Sales minus cost of goods sold.
The following are some accounts from a company's financial statements:
(accounts receivable, cost of goods sold, cash, retained earnings, sales, inventory,
income tax expense, accounts payable)
Which set is a list of all of the items that are used in computing this company's net
income? - Correct Answer ✔✔ Sales, cost of goods sold, and income tax expense.
What cash flow category contains activities whereby cash is obtained from or repaid to
owners or creditors? - Correct Answer ✔✔ Financing
Here are some financial statement items for the year for a company.
Cash received from customers
Cash received from the sale of land
Cash paid for dividends
Cash paid to employees for wages
Cash paid to purchase a new building
Cash paid for rent
Cash received as new investment from owners
Which set of items is a list of items that are used in computing the company's financing
cash flow for the year? - Correct Answer ✔✔ Cash paid for dividends and cash received
as new investment from owners.
, Here are some financial statement items for a company.
Net income
Cash flow from financing activities
Cash balance at the beginning of the year
Sales Cash flow from investing activities
Accounts receivable
Retained earnings at the beginning of the year
Cash flow from operating activities
What items are used in computing the company's ending cash balance for the year? -
Correct Answer ✔✔ Cash balance at the beginning of the year, cash flow from
operating activities, cash flow from investing activities, and cash flow from financing
activities.
How is revenue typically recorded with debits and credits? - Correct Answer ✔✔ As a
credit, representing an increase in equity.
What is the proper way to record an increase in an asset account and an increase in an
equity account? - Correct Answer ✔✔ Asset, debit; equity, credit
How are expenses typically recorded with debits and credits? - Correct Answer ✔✔ As
a debit, representing an increase in assets.
A company purchased inventory for $5,000. The company paid $1,000 cash and the
remainder of the purchase was made on account.
What is included in the journal entry necessary to record this inventory purchase? -
Correct Answer ✔✔ Credit to accounts payable for $4,000.
A company sold inventory that cost $1,300 for $2,000. It received $500 cash and the
remainder was on account.
What is included in the journal entry or entries necessary to record this sale of
inventory? - Correct Answer ✔✔ Debit to accounts receivable for $1,500.
On August 1 of Year 1, a company paid $7,200 for two years' rent. The rental period
starts on August 1 of Year 1.
Which debit or credit is correctly included in the adjusting journal entry necessary on
December 31 of Year 1? - Correct Answer ✔✔ Debit to rent expense for $1,500.
The revenue recognition principle states that revenues are recorded when two main
criteria have been met. One of those criteria is that cash has been collected or
collectability is reasonably assured.
What is the other criterion? - Correct Answer ✔✔ The earnings process is substantially
complete.
What is the matching principle? - Correct Answer ✔✔ Expenses are recorded in the
same period in which the corresponding revenue is recorded.
