WGU D102 FINANCIAL ACCOUNTING
2026/2027: ULTIMATE OA PREP BUNDLE |
VERIFIED EXAM QUESTIONS & ANSWERS
WITH EXCEL WALKTHROUGH | COMPLETE
OBJECTIVE ASSESSMENT STUDY GUIDE |
LATEST UPDATED TEST BANK FOR SUCCESS
• This is your ultimate OA prep bundle for WGU D102 Financial Accounting —
packed with 300 verified exam-style questions covering every testable topic to
maximize your score.
• Study smart: read each question carefully, attempt your answer first before
checking the highlighted correct answer and EXPERT RATIONALE below it.
QUESTION 1 Which financial statement reports a company's financial position
at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Statement of Retained Earnings
➤ D. Balance Sheet
E. Statement of Stockholders' Equity
Correct Answer: D. Balance Sheet
EXPERT RATIONALE: The Balance Sheet (Statement of Financial Position)
reports assets, liabilities, and equity at a specific date, showing what the company
owns and owes at that moment.
QUESTION 2 Which accounting principle requires that expenses be recorded in
the same period as the revenues they help generate?
A. Revenue Recognition Principle
B. Cost Principle
,C. Full Disclosure Principle
D. Going Concern Principle
➤ E. Matching Principle
Correct Answer: E. Matching Principle
EXPERT RATIONALE: The Matching Principle dictates that expenses must be
matched to the revenues they generate within the same accounting period,
ensuring accurate profit measurement.
QUESTION 3 A company purchases equipment for $50,000 cash. How is this
transaction recorded?
A. Debit Cash $50,000; Credit Equipment $50,000
B. Debit Expense $50,000; Credit Cash $50,000
C. Debit Equipment $50,000; Credit Revenue $50,000
D. Debit Accounts Payable $50,000; Credit Equipment $50,000
➤ E. Debit Equipment $50,000; Credit Cash $50,000
Correct Answer: E. Debit Equipment $50,000; Credit Cash $50,000
EXPERT RATIONALE: Purchasing equipment increases the asset Equipment
(debit) and decreases the asset Cash (credit), keeping the accounting equation
balanced.
QUESTION 4 Which of the following is classified as a current asset?
A. Land
B. Equipment
C. Patent
➤ D. Accounts Receivable
,E. Goodwill
Correct Answer: D. Accounts Receivable
EXPERT RATIONALE: Accounts Receivable is expected to be collected within one
year, making it a current asset. Land, equipment, patents, and goodwill are long-
term assets.
QUESTION 5 Under accrual accounting, revenue is recognized when:
A. Cash is received from the customer
B. The invoice is sent to the customer
C. The customer places an order
D. Management decides to record it
➤ E. It is earned and collection is reasonably assured
Correct Answer: E. It is earned and collection is reasonably assured
EXPERT RATIONALE: Accrual accounting recognizes revenue when it is earned
(performance obligation satisfied) regardless of when cash is received.
QUESTION 6 Which inventory costing method assumes the first items
purchased are the first items sold?
A. LIFO
B. Weighted Average
C. Specific Identification
D. Moving Average
➤ E. FIFO
Correct Answer: E. FIFO
, EXPERT RATIONALE: FIFO (First-In, First-Out) assumes the oldest inventory is
sold first, leaving the most recently purchased items in ending inventory.
QUESTION 7 Which of the following accounts has a normal credit balance?
A. Cash
B. Inventory
C. Equipment
D. Dividends
➤ E. Accounts Payable
Correct Answer: E. Accounts Payable
EXPERT RATIONALE: Accounts Payable is a liability account. Liabilities have
normal credit balances because they represent obligations owed by the company.
QUESTION 8 Depreciation is best described as:
A. A method of valuing assets at market price
B. Setting aside cash for asset replacement
C. Writing off an asset when it becomes worthless
D. Increasing the value of an asset over time
➤ E. The systematic allocation of an asset's cost over its useful life
Correct Answer: E. The systematic allocation of an asset's cost over its useful life
EXPERT RATIONALE: Depreciation allocates the cost of a tangible long-term
asset over its useful life, matching the cost to the periods it helps generate revenue.
QUESTION 9 Which financial statement shows revenues and expenses over a
period of time?
2026/2027: ULTIMATE OA PREP BUNDLE |
VERIFIED EXAM QUESTIONS & ANSWERS
WITH EXCEL WALKTHROUGH | COMPLETE
OBJECTIVE ASSESSMENT STUDY GUIDE |
LATEST UPDATED TEST BANK FOR SUCCESS
• This is your ultimate OA prep bundle for WGU D102 Financial Accounting —
packed with 300 verified exam-style questions covering every testable topic to
maximize your score.
• Study smart: read each question carefully, attempt your answer first before
checking the highlighted correct answer and EXPERT RATIONALE below it.
QUESTION 1 Which financial statement reports a company's financial position
at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Statement of Retained Earnings
➤ D. Balance Sheet
E. Statement of Stockholders' Equity
Correct Answer: D. Balance Sheet
EXPERT RATIONALE: The Balance Sheet (Statement of Financial Position)
reports assets, liabilities, and equity at a specific date, showing what the company
owns and owes at that moment.
QUESTION 2 Which accounting principle requires that expenses be recorded in
the same period as the revenues they help generate?
A. Revenue Recognition Principle
B. Cost Principle
,C. Full Disclosure Principle
D. Going Concern Principle
➤ E. Matching Principle
Correct Answer: E. Matching Principle
EXPERT RATIONALE: The Matching Principle dictates that expenses must be
matched to the revenues they generate within the same accounting period,
ensuring accurate profit measurement.
QUESTION 3 A company purchases equipment for $50,000 cash. How is this
transaction recorded?
A. Debit Cash $50,000; Credit Equipment $50,000
B. Debit Expense $50,000; Credit Cash $50,000
C. Debit Equipment $50,000; Credit Revenue $50,000
D. Debit Accounts Payable $50,000; Credit Equipment $50,000
➤ E. Debit Equipment $50,000; Credit Cash $50,000
Correct Answer: E. Debit Equipment $50,000; Credit Cash $50,000
EXPERT RATIONALE: Purchasing equipment increases the asset Equipment
(debit) and decreases the asset Cash (credit), keeping the accounting equation
balanced.
QUESTION 4 Which of the following is classified as a current asset?
A. Land
B. Equipment
C. Patent
➤ D. Accounts Receivable
,E. Goodwill
Correct Answer: D. Accounts Receivable
EXPERT RATIONALE: Accounts Receivable is expected to be collected within one
year, making it a current asset. Land, equipment, patents, and goodwill are long-
term assets.
QUESTION 5 Under accrual accounting, revenue is recognized when:
A. Cash is received from the customer
B. The invoice is sent to the customer
C. The customer places an order
D. Management decides to record it
➤ E. It is earned and collection is reasonably assured
Correct Answer: E. It is earned and collection is reasonably assured
EXPERT RATIONALE: Accrual accounting recognizes revenue when it is earned
(performance obligation satisfied) regardless of when cash is received.
QUESTION 6 Which inventory costing method assumes the first items
purchased are the first items sold?
A. LIFO
B. Weighted Average
C. Specific Identification
D. Moving Average
➤ E. FIFO
Correct Answer: E. FIFO
, EXPERT RATIONALE: FIFO (First-In, First-Out) assumes the oldest inventory is
sold first, leaving the most recently purchased items in ending inventory.
QUESTION 7 Which of the following accounts has a normal credit balance?
A. Cash
B. Inventory
C. Equipment
D. Dividends
➤ E. Accounts Payable
Correct Answer: E. Accounts Payable
EXPERT RATIONALE: Accounts Payable is a liability account. Liabilities have
normal credit balances because they represent obligations owed by the company.
QUESTION 8 Depreciation is best described as:
A. A method of valuing assets at market price
B. Setting aside cash for asset replacement
C. Writing off an asset when it becomes worthless
D. Increasing the value of an asset over time
➤ E. The systematic allocation of an asset's cost over its useful life
Correct Answer: E. The systematic allocation of an asset's cost over its useful life
EXPERT RATIONALE: Depreciation allocates the cost of a tangible long-term
asset over its useful life, matching the cost to the periods it helps generate revenue.
QUESTION 9 Which financial statement shows revenues and expenses over a
period of time?
