1|Page
WGU D104 OBJECTIVE ASSESSMENT NEWEST 2026 TEST BANK
| D104 INTERMEDIATE ACCOUNTING II OA EXAM WITH
COMPLETE QUESTIONS AND CORRECT VERIFIED ANSWERS /
ALREADY GRADED A+ (MOST RECENT!!)
Which method should be used to handle indirect costs of self-
constructed assets?
Assigning no variable overhead to a constructed asset
Allocating overhead on the basis of gained production
Assigning a pro rata portion of all overhead to the asset
Allocating the total overhead to the asset ......ANSWER......Assigning a
pro rata portion of all overhead to the asset
A company purchases land for development into a subdivision. The land
has a factory building on it that will need to be demolished.
Where should the interest costs be allocated?
Interest expenses
General administrative expenses
Cost of the land
Cost of the plant ......ANSWER......Cost of land
In which situation can capitalization of interest be included in the cost
of land?
When holding the land as an investment
,2|Page
When purchasing land with the intension of developing it for lots sales
When selling the land
When building a structure on the land ......ANSWER......When
purchasing land with the intension of developing it for lots sales
Which value should be used to record machinery that was purchased
with a long-term note?
Sum of all estimated payments
Market price of the machinery
Present value of the future payments
Appraised value of the machinery ......ANSWER......Present value of the
future payments
Which item is considered to be a technology-related intangible asset?
Trade secrets
Goodwill
Artistic-related rights
Licensing agreements ......ANSWER......Trade Secrets
Pay out ratio ......ANSWER......Pay out ratio = cash dividends/net income
(less preferred dividends, if applicable)
,3|Page
Return on common stockholders' equity ......ANSWER......Return on
Common Stockholders' Equity = (Net Income - Preferred Dividends) /
Average Common Stockholders' Equity
Book value per share ......ANSWER......Book Value per Share = common
stockholders equity/outstanding shares
Dilutive Securities ......ANSWER......Are securities that can be converted
to common stock. Upon conversion or exercise by the holder, the
dilutive securities reduce (dilute) earnings per share
Antidilutive securities ......ANSWER......Securities, which upon
conversion or exercise, increase earnings per share (or reduce the loss
per share). Companies with complex capital structures will not report
diluted EPS if the securities in their capital structure are antidilutive;
they will report only the basic EPS number.
A company using the composite approach to depreciation sells
equipment for $10,000. The equipment was purchased five years earlier
for $15,000, and the company has already recorded $5,000 in
accumulated depreciation. What is included in the journal entry for the
sale of the equipment?
Debit loss on sale of equipment for $5,000
Credit loss on sale of equipment for $5,000
Debit accumulated depreciation-equipment for $5,000
, 4|Page
Credit accumulated depreciation-equipment for $5,000
......ANSWER......Debit accumulated depreciation-equipment for $5,000.
Several years ago, a company acquired an asset at a cost of $400,000.
Last year, the company recognized an impairment loss of $25,000 and
properly reduced the asset's book value from $250,000 to $225,000.
Using the asset's new base of $225,000, the company calculates
depreciation for the current year to be $10,000, bringing the book value
down to $215,000. However, the company has also determined that the
asset's fair value has recovered and is now estimated to be $260,000.
How should the company measure the asset on its current balance
sheet?
The company should reverse the prior impairment and measure the
asset at its current fair value of $260,000.
The company should reverse the prior impairment and measure the
asset at its fair value prior to the initial impairment of $250,000.
The company should not reverse the impairment and should depreciate
the asset by $10,000 to a new book value of $215,000.
The company sh ......ANSWER......The company should not reverse the
impairment and should depreciate the asset by $10,000 to a new book
value of $215,000.
A company invested $15,000,000 in a coal mine estimated to have
1,500,000 tons of coal. In the first year, the company extracted 100,000
WGU D104 OBJECTIVE ASSESSMENT NEWEST 2026 TEST BANK
| D104 INTERMEDIATE ACCOUNTING II OA EXAM WITH
COMPLETE QUESTIONS AND CORRECT VERIFIED ANSWERS /
ALREADY GRADED A+ (MOST RECENT!!)
Which method should be used to handle indirect costs of self-
constructed assets?
Assigning no variable overhead to a constructed asset
Allocating overhead on the basis of gained production
Assigning a pro rata portion of all overhead to the asset
Allocating the total overhead to the asset ......ANSWER......Assigning a
pro rata portion of all overhead to the asset
A company purchases land for development into a subdivision. The land
has a factory building on it that will need to be demolished.
Where should the interest costs be allocated?
Interest expenses
General administrative expenses
Cost of the land
Cost of the plant ......ANSWER......Cost of land
In which situation can capitalization of interest be included in the cost
of land?
When holding the land as an investment
,2|Page
When purchasing land with the intension of developing it for lots sales
When selling the land
When building a structure on the land ......ANSWER......When
purchasing land with the intension of developing it for lots sales
Which value should be used to record machinery that was purchased
with a long-term note?
Sum of all estimated payments
Market price of the machinery
Present value of the future payments
Appraised value of the machinery ......ANSWER......Present value of the
future payments
Which item is considered to be a technology-related intangible asset?
Trade secrets
Goodwill
Artistic-related rights
Licensing agreements ......ANSWER......Trade Secrets
Pay out ratio ......ANSWER......Pay out ratio = cash dividends/net income
(less preferred dividends, if applicable)
,3|Page
Return on common stockholders' equity ......ANSWER......Return on
Common Stockholders' Equity = (Net Income - Preferred Dividends) /
Average Common Stockholders' Equity
Book value per share ......ANSWER......Book Value per Share = common
stockholders equity/outstanding shares
Dilutive Securities ......ANSWER......Are securities that can be converted
to common stock. Upon conversion or exercise by the holder, the
dilutive securities reduce (dilute) earnings per share
Antidilutive securities ......ANSWER......Securities, which upon
conversion or exercise, increase earnings per share (or reduce the loss
per share). Companies with complex capital structures will not report
diluted EPS if the securities in their capital structure are antidilutive;
they will report only the basic EPS number.
A company using the composite approach to depreciation sells
equipment for $10,000. The equipment was purchased five years earlier
for $15,000, and the company has already recorded $5,000 in
accumulated depreciation. What is included in the journal entry for the
sale of the equipment?
Debit loss on sale of equipment for $5,000
Credit loss on sale of equipment for $5,000
Debit accumulated depreciation-equipment for $5,000
, 4|Page
Credit accumulated depreciation-equipment for $5,000
......ANSWER......Debit accumulated depreciation-equipment for $5,000.
Several years ago, a company acquired an asset at a cost of $400,000.
Last year, the company recognized an impairment loss of $25,000 and
properly reduced the asset's book value from $250,000 to $225,000.
Using the asset's new base of $225,000, the company calculates
depreciation for the current year to be $10,000, bringing the book value
down to $215,000. However, the company has also determined that the
asset's fair value has recovered and is now estimated to be $260,000.
How should the company measure the asset on its current balance
sheet?
The company should reverse the prior impairment and measure the
asset at its current fair value of $260,000.
The company should reverse the prior impairment and measure the
asset at its fair value prior to the initial impairment of $250,000.
The company should not reverse the impairment and should depreciate
the asset by $10,000 to a new book value of $215,000.
The company sh ......ANSWER......The company should not reverse the
impairment and should depreciate the asset by $10,000 to a new book
value of $215,000.
A company invested $15,000,000 in a coal mine estimated to have
1,500,000 tons of coal. In the first year, the company extracted 100,000
