D102 Financial Accounting WGU LATEST UPDATE WITH
COMPLETE questions and correct answers
What information is contained in a balance sheet?
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
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?
$90,000
,What is reported in a multiple-step income statement that is not
reported in a single-step income statement?
Gross Profit
How is gross profit computed?
Sales minus cost of goods sold.
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?
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?
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?
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?
The earnings process is substantially complete.
What is the matching principle?
Expenses are recorded in the same period in which the
corresponding revenue is recorded.
For large, publicly traded companies, why is accrual basis accounting
preferred over cash basis accounting?
Accrual basis accounting provides a more accurate picture of a
company's economic profitability.
COMPLETE questions and correct answers
What information is contained in a balance sheet?
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
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?
$90,000
,What is reported in a multiple-step income statement that is not
reported in a single-step income statement?
Gross Profit
How is gross profit computed?
Sales minus cost of goods sold.
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?
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?
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?
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?
The earnings process is substantially complete.
What is the matching principle?
Expenses are recorded in the same period in which the
corresponding revenue is recorded.
For large, publicly traded companies, why is accrual basis accounting
preferred over cash basis accounting?
Accrual basis accounting provides a more accurate picture of a
company's economic profitability.
