WGU D102 Practice Exam Questions and
Answers (2026) | Complete Exam Prep
Resource | Grade A+
• Which is the proper description of the accounting equation?
Owners' Equity = Assets
Assets = Liabilities + Owners' Equity
Assets = Liabilities
Owners' Equity = Liabilities -✓✓Assets = Liabilities + Owners' Equity
• After the effects of every transaction are considered and recorded, what must the
accounting equation do?
Equal itself, or balance
Equal total owners' equity
Equal total liabilities
Equal total assets -✓✓Equal itself, or balance
• Which statement best describes the main features of inventories?
Goods due from customers who have purchased on account
Goods purchased and held for sale
Goods used by a company on a long-term basis, usually more than five years
Goods used by company employees on a daily basis -✓✓Goods purchased and held for
sale
• What is a classified balance sheet?
A balance sheet that is not publicly disclosed
A balance sheet that distinguishes between current and long-term assets
A balance sheet that is for a period of time rather than as of a point in time
A balance sheet that separates liabilities from equities -✓✓A balance sheet that
distinguishes between current and long-term assets
• What does owners' equity represent?
The difference between total assets and total liabilities
The difference between current assets and long-term assets
The difference between total liabilities and total owners' equity
The difference between current liabilities and long-term liabilities -✓✓The difference
between total assets and total liabilities
,• For most companies, when assets or liabilities are classified as "current" on the
balance sheet, it generally means the related assets or liabilities will be turned into cash
or will be required to be paid, respectively, within what time frame?
The next quarter
The next six months
The next month
The next year -✓✓The next year
• What is owners' equity?
An economic resource that is owned or controlled by a company
An obligation to pay cash, transfer other assets, or provide services to someone else
A residual amount representing the net assets available after all obligations have been
satisfied
The sum of operating, investing, and financing cash flows -✓✓A residual amount
representing the net assets available after all obligations have been satisfied
• Which item is an asset?
Accounts receivable
Capital stock
Retained earnings
Accounts payable -✓✓Accounts receivable
• According to the accounting equation, what is the correct computation of owners'
equity?
Total Assets + Liabilities
Total Assets - Liabilities
Cash + Bank Loan Balance
Cash - Bank Loan Balance -✓✓Total Assets - Liabilities
• What is an accurate description of accounts payable?
Obligation arising from the purchase of inventory on account
Obligation arising from the sale of office supplies on account
Obligation arising from the payment of income taxes on account
Obligation arising from the sale of equipment on account -✓✓Obligation arising from the
purchase of inventory on account
• Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
,Inventory
Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets?
Cash, retained earnings, and capital stock
Cash, buildings, and land
Cash, accounts receivable, and inventory
Cash, inventory, and capital stock -✓✓Cash, accounts receivable, and inventory
• What is bad debt expense?
Amount of uncollectible accounts created by credit sales during the year
Amount of inventory lost, stolen, or sold during the year
Amount of gross profit divided by sales for the year
Amount of wear and tear on long-lived assets during the year -✓✓Amount of
uncollectible accounts created by credit sales during the year
• Which item is an expense item?
Cost of Goods Sold
Sales
Cash
Accounts Payable -✓✓Cost of Goods Sold
• What is a single-step income statement?
Emphasizes separate computation of gross profit and operating income
Groups and total revenues/groups and total expenses
Omits both interest expense and income tax expense
Includes all other expenses, but omits income tax expense -✓✓Groups and total
revenues/groups and total expenses
• What is "gross profit"?
Sales − Cost of Goods Sold.
Accounts Receivable − Accounts Payable
Total Assets − Total Liabilities
Total Revenues − Total Expenses -✓✓Sales − Cost of Goods Sold.
• What is a company's gross profit percentage?
, Net Income ÷ Owners' Equity
Gross Profit ÷ Sales
Net Income ÷ Sales
Gross Profit ÷ Net Income -✓✓Gross Profit ÷ Sales
• Which item is a revenue item?
Accounts Receivable
Cash
Loan Payable
Sales -✓✓Sales
• What is an income statement?
Report of the assets, liabilities, and equity of a company as of a point in time
Report of the operating, investing, and financing cash flows of a company during a
period
Report of the revenues and expenses of a company during a period
Report of the total of the balances of all of a company's bank accounts -✓✓Report of the
revenues and expenses of a company during a period
Report of the total of the balances of all of a company's bank accounts
• What is an example of an expense that fits under the heading "selling, general, and
administrative expense"?
Wages of company headquarters accounting staff
Fees earned by providing services
Purchase cost of inventory items bought from suppliers
Cost paid for the use of someone else's money -✓✓Wages of company headquarters
accounting staff
• What is depreciation expense?
The amount of uncollectible accounts created by credit sales during the year
The amount of inventory lost, stolen, or sold during the year
The amount of gross profit divided by sales for the year
The amount of wear and tear on long-lived assets during the year -✓✓The amount of
wear and tear on long-lived assets during the year
• Which are components of an income statement?
Current and noncurrent assets
Retained earnings and dividends
Short-term and accrued liabilities
Revenue and expenses -✓✓Revenue and expenses
Answers (2026) | Complete Exam Prep
Resource | Grade A+
• Which is the proper description of the accounting equation?
Owners' Equity = Assets
Assets = Liabilities + Owners' Equity
Assets = Liabilities
Owners' Equity = Liabilities -✓✓Assets = Liabilities + Owners' Equity
• After the effects of every transaction are considered and recorded, what must the
accounting equation do?
Equal itself, or balance
Equal total owners' equity
Equal total liabilities
Equal total assets -✓✓Equal itself, or balance
• Which statement best describes the main features of inventories?
Goods due from customers who have purchased on account
Goods purchased and held for sale
Goods used by a company on a long-term basis, usually more than five years
Goods used by company employees on a daily basis -✓✓Goods purchased and held for
sale
• What is a classified balance sheet?
A balance sheet that is not publicly disclosed
A balance sheet that distinguishes between current and long-term assets
A balance sheet that is for a period of time rather than as of a point in time
A balance sheet that separates liabilities from equities -✓✓A balance sheet that
distinguishes between current and long-term assets
• What does owners' equity represent?
The difference between total assets and total liabilities
The difference between current assets and long-term assets
The difference between total liabilities and total owners' equity
The difference between current liabilities and long-term liabilities -✓✓The difference
between total assets and total liabilities
,• For most companies, when assets or liabilities are classified as "current" on the
balance sheet, it generally means the related assets or liabilities will be turned into cash
or will be required to be paid, respectively, within what time frame?
The next quarter
The next six months
The next month
The next year -✓✓The next year
• What is owners' equity?
An economic resource that is owned or controlled by a company
An obligation to pay cash, transfer other assets, or provide services to someone else
A residual amount representing the net assets available after all obligations have been
satisfied
The sum of operating, investing, and financing cash flows -✓✓A residual amount
representing the net assets available after all obligations have been satisfied
• Which item is an asset?
Accounts receivable
Capital stock
Retained earnings
Accounts payable -✓✓Accounts receivable
• According to the accounting equation, what is the correct computation of owners'
equity?
Total Assets + Liabilities
Total Assets - Liabilities
Cash + Bank Loan Balance
Cash - Bank Loan Balance -✓✓Total Assets - Liabilities
• What is an accurate description of accounts payable?
Obligation arising from the purchase of inventory on account
Obligation arising from the sale of office supplies on account
Obligation arising from the payment of income taxes on account
Obligation arising from the sale of equipment on account -✓✓Obligation arising from the
purchase of inventory on account
• Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
,Inventory
Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets?
Cash, retained earnings, and capital stock
Cash, buildings, and land
Cash, accounts receivable, and inventory
Cash, inventory, and capital stock -✓✓Cash, accounts receivable, and inventory
• What is bad debt expense?
Amount of uncollectible accounts created by credit sales during the year
Amount of inventory lost, stolen, or sold during the year
Amount of gross profit divided by sales for the year
Amount of wear and tear on long-lived assets during the year -✓✓Amount of
uncollectible accounts created by credit sales during the year
• Which item is an expense item?
Cost of Goods Sold
Sales
Cash
Accounts Payable -✓✓Cost of Goods Sold
• What is a single-step income statement?
Emphasizes separate computation of gross profit and operating income
Groups and total revenues/groups and total expenses
Omits both interest expense and income tax expense
Includes all other expenses, but omits income tax expense -✓✓Groups and total
revenues/groups and total expenses
• What is "gross profit"?
Sales − Cost of Goods Sold.
Accounts Receivable − Accounts Payable
Total Assets − Total Liabilities
Total Revenues − Total Expenses -✓✓Sales − Cost of Goods Sold.
• What is a company's gross profit percentage?
, Net Income ÷ Owners' Equity
Gross Profit ÷ Sales
Net Income ÷ Sales
Gross Profit ÷ Net Income -✓✓Gross Profit ÷ Sales
• Which item is a revenue item?
Accounts Receivable
Cash
Loan Payable
Sales -✓✓Sales
• What is an income statement?
Report of the assets, liabilities, and equity of a company as of a point in time
Report of the operating, investing, and financing cash flows of a company during a
period
Report of the revenues and expenses of a company during a period
Report of the total of the balances of all of a company's bank accounts -✓✓Report of the
revenues and expenses of a company during a period
Report of the total of the balances of all of a company's bank accounts
• What is an example of an expense that fits under the heading "selling, general, and
administrative expense"?
Wages of company headquarters accounting staff
Fees earned by providing services
Purchase cost of inventory items bought from suppliers
Cost paid for the use of someone else's money -✓✓Wages of company headquarters
accounting staff
• What is depreciation expense?
The amount of uncollectible accounts created by credit sales during the year
The amount of inventory lost, stolen, or sold during the year
The amount of gross profit divided by sales for the year
The amount of wear and tear on long-lived assets during the year -✓✓The amount of
wear and tear on long-lived assets during the year
• Which are components of an income statement?
Current and noncurrent assets
Retained earnings and dividends
Short-term and accrued liabilities
Revenue and expenses -✓✓Revenue and expenses
