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WGU D102 PRE ASSESSMENT ACTUAL
EXAM PREP 2026 ALL QUESTIONS AND
CORRECT DETAILED ANSWERS ALREADY
A GRADED WITH EXPERT FEEDBACK
|NEW AND REVISED
A company was started last year when the shareholders invested $70
cash into the company. At that time, the organization also borrowed $30
cash from a local bank. The organization used $80 cash to purchase
inventory for $80. This year the company sold all of the inventory for
$55 cash. (That is not a typographical error; the amount received for all
of the inventory was only $55 cash.)
Assuming that there is no interest on the loan, what is true with respect
to this company's balance sheet after the sale of the inventory?
Total owners' equity is $45.
Total owners' equity is $95.
Inventory is $25.
Cash is $55. - ANSWER- Total owners' equity is $45.
How are expenses typically recorded with debits and credits?
As a credit, representing an increase in equity.
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As a credit, representing a reduction in assets.
As a debit, representing a reduction in equity.
As a debit, representing an increase in assets. - ANSWER- As a debit,
representing a reduction in equity.
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?
Debit to accounts payable for $4,000.
Credit to accounts payable for $4,000.
Credit to accounts receivable for $4,000.
Debit to accounts receivable for $4,000. - ANSWER- 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.
Credit to cost of goods sold for $1,300.
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Debit to sales for $1,300.
Debit to accounts payable for $1,500. - ANSWER- 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?
Credit to rent expense for $1,500.
Debit to rent expense for $1,500.
Debit to rent expense for $5,100.
Credit to prepaid rent for $5,100. - ANSWER- 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?
Overhead has been properly allocated.
Expense targets for the period have been reached.
You Selected
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All taxes - sales tax, income tax, and value-added tax - have been paid.
The earnings process is substantially complete. - ANSWER- The
earnings process is substantially complete.
What is the matching principle?
Retained earnings are recorded in the same period in which the
corresponding asset is recorded.
Expenses are recorded in the same period in which the corresponding
revenue is recorded.
Liabilities are recorded in the same period in which the corresponding
asset is recorded.
Revenues are recorded in the same period in which the earnings process
becomes complete. - ANSWER- 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.
Cash basis accounting requires complex estimates and judgments that
make the reported numbers less reliable.
Accrual basis accounting is much easier to implement because no
estimates are needed and internal controls are not necessary.
WGU D102 PRE ASSESSMENT ACTUAL
EXAM PREP 2026 ALL QUESTIONS AND
CORRECT DETAILED ANSWERS ALREADY
A GRADED WITH EXPERT FEEDBACK
|NEW AND REVISED
A company was started last year when the shareholders invested $70
cash into the company. At that time, the organization also borrowed $30
cash from a local bank. The organization used $80 cash to purchase
inventory for $80. This year the company sold all of the inventory for
$55 cash. (That is not a typographical error; the amount received for all
of the inventory was only $55 cash.)
Assuming that there is no interest on the loan, what is true with respect
to this company's balance sheet after the sale of the inventory?
Total owners' equity is $45.
Total owners' equity is $95.
Inventory is $25.
Cash is $55. - ANSWER- Total owners' equity is $45.
How are expenses typically recorded with debits and credits?
As a credit, representing an increase in equity.
,2|Page
As a credit, representing a reduction in assets.
As a debit, representing a reduction in equity.
As a debit, representing an increase in assets. - ANSWER- As a debit,
representing a reduction in equity.
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?
Debit to accounts payable for $4,000.
Credit to accounts payable for $4,000.
Credit to accounts receivable for $4,000.
Debit to accounts receivable for $4,000. - ANSWER- 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.
Credit to cost of goods sold for $1,300.
,3|Page
Debit to sales for $1,300.
Debit to accounts payable for $1,500. - ANSWER- 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?
Credit to rent expense for $1,500.
Debit to rent expense for $1,500.
Debit to rent expense for $5,100.
Credit to prepaid rent for $5,100. - ANSWER- 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?
Overhead has been properly allocated.
Expense targets for the period have been reached.
You Selected
, 4|Page
All taxes - sales tax, income tax, and value-added tax - have been paid.
The earnings process is substantially complete. - ANSWER- The
earnings process is substantially complete.
What is the matching principle?
Retained earnings are recorded in the same period in which the
corresponding asset is recorded.
Expenses are recorded in the same period in which the corresponding
revenue is recorded.
Liabilities are recorded in the same period in which the corresponding
asset is recorded.
Revenues are recorded in the same period in which the earnings process
becomes complete. - ANSWER- 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.
Cash basis accounting requires complex estimates and judgments that
make the reported numbers less reliable.
Accrual basis accounting is much easier to implement because no
estimates are needed and internal controls are not necessary.
