WGU D103 ASSET LIABILITIES AND EQUITY
FUNDAMENTALS ASSESSMENT 2026
COMPREHENSIVE REVIEW AND
SOLUTIONS
◉ treasury stock
Answer: Generally, the cost of shares repurchased.
◉ current ratio (liquidity)
Answer: current assets / current liabilities
◉ quick or acid-test ratio (liquidity)
Answer: (cash + short-term investments + net accounts receivable1)
/ current liabilities 1Net accounts receivable = credit sales -
allowance for doubtful accounts
◉ quick or acid-test ratio (liquidity)
Answer: (current assets - inventory) / current liabilities
◉ accounts receivable turnover (activity)
Answer: net sales / average net accounts receivable
, ◉ days to collect accounts receivable (activity)
Answer: 365 days / accounts receivable turnover
◉ days to collect accounts receivable (activity)
Answer: (days in period x average accounts receivable) / net credit
sales
◉ Inventory turnover (activity)
Answer: cost of goods sold / average inventory
◉ days to sell inventory (activity)
Answer: (days in period x average inventory) / cost of goods sold
◉ Which role does the Securities and Exchange Commission (SEC)
play in formulation of accounting standards?
Answer: The SEC oversees and enforces accounting standards
established by FASB which formulates and implements accounting
standards.
◉ What is the role of the Financial Accounting Standards Board
(FASB) task forces in standards setting?
FUNDAMENTALS ASSESSMENT 2026
COMPREHENSIVE REVIEW AND
SOLUTIONS
◉ treasury stock
Answer: Generally, the cost of shares repurchased.
◉ current ratio (liquidity)
Answer: current assets / current liabilities
◉ quick or acid-test ratio (liquidity)
Answer: (cash + short-term investments + net accounts receivable1)
/ current liabilities 1Net accounts receivable = credit sales -
allowance for doubtful accounts
◉ quick or acid-test ratio (liquidity)
Answer: (current assets - inventory) / current liabilities
◉ accounts receivable turnover (activity)
Answer: net sales / average net accounts receivable
, ◉ days to collect accounts receivable (activity)
Answer: 365 days / accounts receivable turnover
◉ days to collect accounts receivable (activity)
Answer: (days in period x average accounts receivable) / net credit
sales
◉ Inventory turnover (activity)
Answer: cost of goods sold / average inventory
◉ days to sell inventory (activity)
Answer: (days in period x average inventory) / cost of goods sold
◉ Which role does the Securities and Exchange Commission (SEC)
play in formulation of accounting standards?
Answer: The SEC oversees and enforces accounting standards
established by FASB which formulates and implements accounting
standards.
◉ What is the role of the Financial Accounting Standards Board
(FASB) task forces in standards setting?
