WGU D774 INTRODUCTION TO BUSINESS ACCOUNTING
ACTUAL EXAM 2026/2027 | Objective Assessment | 100%
Correct Answers with Detailed Rationales | Pass Guaranteed
- A+ Graded
Assessment Overview: This comprehensive objective assessment evaluates mastery of
introductory business accounting concepts aligned with Western Governors University's
competency-based education model and current GAAP/IFRS standards. The
assessment contains 75 questions distributed across 6 core competencies,
emphasizing application (50%), analysis (25%), comprehension (15%), and recall (10%).
Competency 1: Accounting Cycle & Financial Statements (15 Questions)
Q1: Transaction Analysis & Journal Entry
Scenario: On March 15, 2026, BrightStart Consulting received $4,500 cash from a client
for services to be performed over the next three months (March 15 - June 15). The
company properly recorded this transaction. What is the appropriate journal entry on
March 15?
A. Debit Cash $4,500; Credit Service Revenue $4,500
B. Debit Unearned Revenue $4,500; Credit Cash $4,500
C. Debit Cash $4,500; Credit Unearned Revenue $4,500 [CORRECT]
,D. Debit Accounts Receivable $4,500; Credit Service Revenue $4,500
Correct Answer: C
Rationale: When cash is received before services are performed, this creates a liability
(unearned revenue/deferred revenue) under the revenue recognition principle. The
company has an obligation to perform services in the future.
● Debit Cash $4,500: Increases the asset account (cash received)
● Credit Unearned Revenue $4,500: Increases the liability account (obligation to
perform services)
Why other options are incorrect:
● A: Incorrectly recognizes revenue immediately, violating the revenue recognition
principle. Revenue can only be recognized when earned (as services are
performed).
● B: Reverses the debit/credit logic and incorrectly reduces unearned revenue
when no revenue has been earned yet.
● D: Incorrect because cash was received (not accounts receivable), and revenue is
not yet earned.
Q2: Adjusting Entries - Accruals
Scenario: Wilson Enterprises pays its employees biweekly. The pay period ends on
Friday, but December 31, 2026 (year-end) falls on a Wednesday. Employees earned
$12,000 for Monday through Wednesday but will not be paid until January 3, 2027. What
adjusting entry is required on December 31?
,A. Debit Salaries Expense $12,000; Credit Cash $12,000
B. Debit Salaries Expense $12,000; Credit Salaries Payable $12,000 [CORRECT]
C. Debit Salaries Payable $12,000; Credit Salaries Expense $12,000
D. No entry required until payment date
Correct Answer: B
Rationale: Under accrual accounting and the matching principle, expenses must be
recorded in the period incurred, regardless of payment timing. This is an accrued
expense (accrued liability).
● Debit Salaries Expense $12,000: Recognizes the expense in 2026 when labor was
used
● Credit Salaries Payable $12,000: Recognizes the liability for wages owed but not
yet paid
Why other options are incorrect:
● A: Incorrect because cash was not paid on December 31; this would be the entry
on January 3 payment date.
● C: Reverses the proper entry; this would reduce expense and liability, which is
incorrect.
● D: Violates the matching principle and accrual accounting. Expenses must be
recorded when incurred, not when paid.
, Q3: Trial Balance Analysis
Scenario: A company's unadjusted trial balance shows total debits of $125,000 and
total credits of $123,500. Which situation could cause this discrepancy?
A. Recording a $1,500 cash payment as a debit to Accounts Payable and a credit to
Cash
B. Failing to record a $1,500 debit to Supplies Expense and credit to Supplies
C. Recording a $750 purchase of equipment as a debit to Equipment and a credit to
Accounts Payable twice
D. Recording a $750 purchase of supplies on account as a debit to Supplies only (no
credit entry) [CORRECT]
Correct Answer: D
Rationale: A trial balance discrepancy of $1,500 ($125,000 - $123,500 = $1,500)
indicates a single-side error or mathematical error.
● Option D analysis: Recording only the debit to Supplies ($750) without the
corresponding credit creates a $750 excess in debits. However, the discrepancy
is $1,500, suggesting this error happened twice or involves $1,500. Actually, if the
error was $1,500 with only a debit recorded, debits would exceed credits by
$1,500. This is the only option showing a single-side entry error.
Why other options are incorrect:
ACTUAL EXAM 2026/2027 | Objective Assessment | 100%
Correct Answers with Detailed Rationales | Pass Guaranteed
- A+ Graded
Assessment Overview: This comprehensive objective assessment evaluates mastery of
introductory business accounting concepts aligned with Western Governors University's
competency-based education model and current GAAP/IFRS standards. The
assessment contains 75 questions distributed across 6 core competencies,
emphasizing application (50%), analysis (25%), comprehension (15%), and recall (10%).
Competency 1: Accounting Cycle & Financial Statements (15 Questions)
Q1: Transaction Analysis & Journal Entry
Scenario: On March 15, 2026, BrightStart Consulting received $4,500 cash from a client
for services to be performed over the next three months (March 15 - June 15). The
company properly recorded this transaction. What is the appropriate journal entry on
March 15?
A. Debit Cash $4,500; Credit Service Revenue $4,500
B. Debit Unearned Revenue $4,500; Credit Cash $4,500
C. Debit Cash $4,500; Credit Unearned Revenue $4,500 [CORRECT]
,D. Debit Accounts Receivable $4,500; Credit Service Revenue $4,500
Correct Answer: C
Rationale: When cash is received before services are performed, this creates a liability
(unearned revenue/deferred revenue) under the revenue recognition principle. The
company has an obligation to perform services in the future.
● Debit Cash $4,500: Increases the asset account (cash received)
● Credit Unearned Revenue $4,500: Increases the liability account (obligation to
perform services)
Why other options are incorrect:
● A: Incorrectly recognizes revenue immediately, violating the revenue recognition
principle. Revenue can only be recognized when earned (as services are
performed).
● B: Reverses the debit/credit logic and incorrectly reduces unearned revenue
when no revenue has been earned yet.
● D: Incorrect because cash was received (not accounts receivable), and revenue is
not yet earned.
Q2: Adjusting Entries - Accruals
Scenario: Wilson Enterprises pays its employees biweekly. The pay period ends on
Friday, but December 31, 2026 (year-end) falls on a Wednesday. Employees earned
$12,000 for Monday through Wednesday but will not be paid until January 3, 2027. What
adjusting entry is required on December 31?
,A. Debit Salaries Expense $12,000; Credit Cash $12,000
B. Debit Salaries Expense $12,000; Credit Salaries Payable $12,000 [CORRECT]
C. Debit Salaries Payable $12,000; Credit Salaries Expense $12,000
D. No entry required until payment date
Correct Answer: B
Rationale: Under accrual accounting and the matching principle, expenses must be
recorded in the period incurred, regardless of payment timing. This is an accrued
expense (accrued liability).
● Debit Salaries Expense $12,000: Recognizes the expense in 2026 when labor was
used
● Credit Salaries Payable $12,000: Recognizes the liability for wages owed but not
yet paid
Why other options are incorrect:
● A: Incorrect because cash was not paid on December 31; this would be the entry
on January 3 payment date.
● C: Reverses the proper entry; this would reduce expense and liability, which is
incorrect.
● D: Violates the matching principle and accrual accounting. Expenses must be
recorded when incurred, not when paid.
, Q3: Trial Balance Analysis
Scenario: A company's unadjusted trial balance shows total debits of $125,000 and
total credits of $123,500. Which situation could cause this discrepancy?
A. Recording a $1,500 cash payment as a debit to Accounts Payable and a credit to
Cash
B. Failing to record a $1,500 debit to Supplies Expense and credit to Supplies
C. Recording a $750 purchase of equipment as a debit to Equipment and a credit to
Accounts Payable twice
D. Recording a $750 purchase of supplies on account as a debit to Supplies only (no
credit entry) [CORRECT]
Correct Answer: D
Rationale: A trial balance discrepancy of $1,500 ($125,000 - $123,500 = $1,500)
indicates a single-side error or mathematical error.
● Option D analysis: Recording only the debit to Supplies ($750) without the
corresponding credit creates a $750 excess in debits. However, the discrepancy
is $1,500, suggesting this error happened twice or involves $1,500. Actually, if the
error was $1,500 with only a debit recorded, debits would exceed credits by
$1,500. This is the only option showing a single-side entry error.
Why other options are incorrect:
