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WGU D105 Intermediate Accounting III OBJECTIVE
ASSESSMENT ACTUAL EXAM STUDY GUIDE 2025/2026
ACCURATE QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES || 100% GUARANTEED
PASS <BRAND NEW VERSION>
Financial statements from annual report are
.......Answer.........adjusted for the new accounting priciple and
carrying values of assets and liabilities as of the beginning of
the first year presented is adjusted
Accounting principle change disclosure in the notes includes
.......Answer.........The nature of and reason for the change in
accounting principle and an explanation of why the newly
adopted accounting principle is preferable. The effect of the
accounting change on the carrying amounts of assets and
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liabilities as of the beginning of the first year's financial
statements presented. The cumulative effect on retained
earnings. The cumulative effect of the accounting change is
reported on the beginning (opening) balance of retained
earnings for the earliest period financial statement presented.
Exception to the retrospective approach
.......Answer.........Although a change to the equity method is a
change in accounting principle, it is accounted for prospectively
and not retrospectively. It is impracticable to estimate the impact
of the accounting change because of a lack of information. This
is referred to as the impracticability exception.
What is not an accounting change? .......Answer.........Deferring
marketing costs that were previously expensed but are now
material. Adopting the percentage-of-completion method of
recognizing the revenue of newly acquired contracts.
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Changing from FIFO to LIFO is accounted for
.......Answer.........Prospectively. This change would require
subjective assumptions about the LIFO layers.
The cumulative effect of an accounting change is reported in
.......Answer.........Retained earnings statement at the beginning
balance of the earliest year presented
When an accounting change is reported under the retrospective
approach, prior years' financial statements are
.......Answer.........Revised to reflect the use of the changed
principle
depreciation expense .......Answer.........addition to operating
activities
amortization of intangibles and deffered charges
.......Answer.........addition to operating activities
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amoritization of discount on bonds payable
.......Answer.........addition to operating activities
increase in deferred income tax liability
.......Answer.........addition to operating activities
loss on investment in common stock using equity method
.......Answer.........addition to operating activities
loss on sale of plant assets .......Answer.........addition to operating
activities
loss on impairment of assets .......Answer.........addition to
operating activities
decrease in receivables .......Answer.........addition to operating
activities
WGU D105 Intermediate Accounting III OBJECTIVE
ASSESSMENT ACTUAL EXAM STUDY GUIDE 2025/2026
ACCURATE QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES || 100% GUARANTEED
PASS <BRAND NEW VERSION>
Financial statements from annual report are
.......Answer.........adjusted for the new accounting priciple and
carrying values of assets and liabilities as of the beginning of
the first year presented is adjusted
Accounting principle change disclosure in the notes includes
.......Answer.........The nature of and reason for the change in
accounting principle and an explanation of why the newly
adopted accounting principle is preferable. The effect of the
accounting change on the carrying amounts of assets and
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liabilities as of the beginning of the first year's financial
statements presented. The cumulative effect on retained
earnings. The cumulative effect of the accounting change is
reported on the beginning (opening) balance of retained
earnings for the earliest period financial statement presented.
Exception to the retrospective approach
.......Answer.........Although a change to the equity method is a
change in accounting principle, it is accounted for prospectively
and not retrospectively. It is impracticable to estimate the impact
of the accounting change because of a lack of information. This
is referred to as the impracticability exception.
What is not an accounting change? .......Answer.........Deferring
marketing costs that were previously expensed but are now
material. Adopting the percentage-of-completion method of
recognizing the revenue of newly acquired contracts.
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Changing from FIFO to LIFO is accounted for
.......Answer.........Prospectively. This change would require
subjective assumptions about the LIFO layers.
The cumulative effect of an accounting change is reported in
.......Answer.........Retained earnings statement at the beginning
balance of the earliest year presented
When an accounting change is reported under the retrospective
approach, prior years' financial statements are
.......Answer.........Revised to reflect the use of the changed
principle
depreciation expense .......Answer.........addition to operating
activities
amortization of intangibles and deffered charges
.......Answer.........addition to operating activities
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amoritization of discount on bonds payable
.......Answer.........addition to operating activities
increase in deferred income tax liability
.......Answer.........addition to operating activities
loss on investment in common stock using equity method
.......Answer.........addition to operating activities
loss on sale of plant assets .......Answer.........addition to operating
activities
loss on impairment of assets .......Answer.........addition to
operating activities
decrease in receivables .......Answer.........addition to operating
activities
