WGU D102 FINANCIAL ACCOUNTING FINAL
OBJECTIVE ASSESSMENT TEST BANK EXAM
2026/2027 WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED
ANSWERS |CURRENTLY TESTING
QUESTIONS AND SOLUTIONS|ALREADY
GRADED A+|NEWEST |BRAND NEW
VERSION|JUST RELEASED!!
On May 1 of Year 1, Bullzai, Inc., paid $2,400 cash for rent. This $2,400 rental payment covers
the period from May 1 of Year 1 to April 30 of Year 2. On May 1, the payment of the cash was
recorded as an asset as prepaid rent.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this prepaid rent?
Debit to Rent Expense for $1,600
Debit to Rent Expense for $800
Credit to Rent Expense for $800
Credit to Rent Expense for $1,600
Debit to Rent Expense for $1,600
On October 1 of Year 1, Quiet Flag Industries made a $50,000 cash loan to another company.
The interest rate on the loan is 13 percent. No cash payments will be collected on the loan until
September 30 of Year 2.
Which debit or credit is correctly included in the adjusting journal entry necessary on Quiet
Flag's books (the lender) on December 31 with respect to this loan?
1|Page
,Credit to Interest Revenue for $4,875
Debit to Interest Revenue for $1,625
Credit to Interest Revenue for $1,625
Debit to Interest Revenue for $4,875
Credit to Interest Revenue for $1,625
On September 1 of Year 1, Endothon Company paid $36,000 cash for insurance. This $36,000
insurance payment covers the period from September 1 of Year 1 to August 31 of Year 2. On
September 1, the payment of the cash was recorded as an asset as prepaid insurance.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this prepaid insurance?
Credit to Insurance Expense for $12,000
Credit to Insurance Expense for $24,000
Debit to Insurance Expense for $12,000
Debit to Insurance Expense for $24,000
Debit to Insurance Expense for $12,000
The revenue recognition principle states that revenues are recorded when two main criteria
have been met. One of those criteria is that the earnings process is substantially complete.
What is the other criterion?
Cash has been collected or collectability is reasonably assured.
Necessary documentation has been filed with the appropriate government agency.
Revenue targets for the period have been reached.
Standard forecasting procedures are implemented.
Cash has been collected or collectability is reasonably assured.
2|Page
,What is cash basis accounting?
Payment of all income taxes in cash in the period legally required
Recording revenues when cash is received and expenses when cash is paid
Recording revenues when earned and expenses when incurred
Separation of accounting items into operating, investing, and financing activities
Recording revenues when cash is received and expenses when cash is paid
On September 1 of Year 1, the company received $3,600 cash for rent in advance. This $3,600
rental receipt covers the period from September 1 of Year 1 to August 31 of Year 2.
Assuming that this is not an adjusting journal entry, which debit or credit is correctly included in
the journal entry necessary to record this cash received for rent in advance?
Debit to Rent Revenue for $3,600
Credit to Unearned Rent for $3,600
Credit to Rent Revenue for $3,600
Debit to Unearned Rent for $3,600
Credit to Unearned Rent for $3,600
On September 1 of Year 1, the company received $3,600 cash for rent in advance. This $3,600
rental receipt covers the period from September 1 of Year 1 to August 31 of Year 2. On
September 1, the receipt of the cash was recorded as a liability.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this rent received in advance?
Credit to Rent Revenue for $1,200
Debit to Rent Revenue for $2,400
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, Credit to Rent Revenue for $2,400
Debit to Rent Revenue for $1,200
Credit to Rent Revenue for $1,200
On February 1 of Year 1, Sparkit Company received $100,000 cash from a one-year bank loan.
The interest rate on the loan is 8 percent. No payments are due on the loan until January 31 of
Year 2.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this loan?
Credit to Interest Payable for $8,000
Credit to Interest Expense for $8,000
Debit to Interest Expense for $7,333
Debit to Interest Payable for $7,333
Debit to Interest Expense for $7,333
Which one of these items is a nominal account?
Sales Revenue
Accounts Payable
Capital Stock
Retained Earnings
Sales Revenue
Which item is closed to a zero balance at the end of each accounting period?
Cash
Cost of Goods Sold
4|Page
OBJECTIVE ASSESSMENT TEST BANK EXAM
2026/2027 WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED
ANSWERS |CURRENTLY TESTING
QUESTIONS AND SOLUTIONS|ALREADY
GRADED A+|NEWEST |BRAND NEW
VERSION|JUST RELEASED!!
On May 1 of Year 1, Bullzai, Inc., paid $2,400 cash for rent. This $2,400 rental payment covers
the period from May 1 of Year 1 to April 30 of Year 2. On May 1, the payment of the cash was
recorded as an asset as prepaid rent.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this prepaid rent?
Debit to Rent Expense for $1,600
Debit to Rent Expense for $800
Credit to Rent Expense for $800
Credit to Rent Expense for $1,600
Debit to Rent Expense for $1,600
On October 1 of Year 1, Quiet Flag Industries made a $50,000 cash loan to another company.
The interest rate on the loan is 13 percent. No cash payments will be collected on the loan until
September 30 of Year 2.
Which debit or credit is correctly included in the adjusting journal entry necessary on Quiet
Flag's books (the lender) on December 31 with respect to this loan?
1|Page
,Credit to Interest Revenue for $4,875
Debit to Interest Revenue for $1,625
Credit to Interest Revenue for $1,625
Debit to Interest Revenue for $4,875
Credit to Interest Revenue for $1,625
On September 1 of Year 1, Endothon Company paid $36,000 cash for insurance. This $36,000
insurance payment covers the period from September 1 of Year 1 to August 31 of Year 2. On
September 1, the payment of the cash was recorded as an asset as prepaid insurance.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this prepaid insurance?
Credit to Insurance Expense for $12,000
Credit to Insurance Expense for $24,000
Debit to Insurance Expense for $12,000
Debit to Insurance Expense for $24,000
Debit to Insurance Expense for $12,000
The revenue recognition principle states that revenues are recorded when two main criteria
have been met. One of those criteria is that the earnings process is substantially complete.
What is the other criterion?
Cash has been collected or collectability is reasonably assured.
Necessary documentation has been filed with the appropriate government agency.
Revenue targets for the period have been reached.
Standard forecasting procedures are implemented.
Cash has been collected or collectability is reasonably assured.
2|Page
,What is cash basis accounting?
Payment of all income taxes in cash in the period legally required
Recording revenues when cash is received and expenses when cash is paid
Recording revenues when earned and expenses when incurred
Separation of accounting items into operating, investing, and financing activities
Recording revenues when cash is received and expenses when cash is paid
On September 1 of Year 1, the company received $3,600 cash for rent in advance. This $3,600
rental receipt covers the period from September 1 of Year 1 to August 31 of Year 2.
Assuming that this is not an adjusting journal entry, which debit or credit is correctly included in
the journal entry necessary to record this cash received for rent in advance?
Debit to Rent Revenue for $3,600
Credit to Unearned Rent for $3,600
Credit to Rent Revenue for $3,600
Debit to Unearned Rent for $3,600
Credit to Unearned Rent for $3,600
On September 1 of Year 1, the company received $3,600 cash for rent in advance. This $3,600
rental receipt covers the period from September 1 of Year 1 to August 31 of Year 2. On
September 1, the receipt of the cash was recorded as a liability.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this rent received in advance?
Credit to Rent Revenue for $1,200
Debit to Rent Revenue for $2,400
3|Page
, Credit to Rent Revenue for $2,400
Debit to Rent Revenue for $1,200
Credit to Rent Revenue for $1,200
On February 1 of Year 1, Sparkit Company received $100,000 cash from a one-year bank loan.
The interest rate on the loan is 8 percent. No payments are due on the loan until January 31 of
Year 2.
Which debit or credit is correctly included in the adjusting journal entry necessary on December
31 with respect to this loan?
Credit to Interest Payable for $8,000
Credit to Interest Expense for $8,000
Debit to Interest Expense for $7,333
Debit to Interest Payable for $7,333
Debit to Interest Expense for $7,333
Which one of these items is a nominal account?
Sales Revenue
Accounts Payable
Capital Stock
Retained Earnings
Sales Revenue
Which item is closed to a zero balance at the end of each accounting period?
Cash
Cost of Goods Sold
4|Page
