WG U D 1 0 3 · I N T E R M E D I AT E
AC C O U N T I N G I 2026 update
Revenue
Recognition
A complete 100-question practice exam
covering the ASC 606 revenue recognition
competencies of Units 5–7. Every question
includes the correct answer, a detailed
rationale, and the concept tag to review
before test day.
UNI T 5 UNI T 6 UNI T 7
100 Multiple-Choice Questions · Answers with
Rationales
ASC 606 Five-Step Model · Balanced Conceptual &
Computational · Updated 2026
,PRACTI CE EXAM O A2 · SELF- STUDY EDI TI O N
, WGU D103 | INTERMEDIATE ACCOUNTING I | UNITS 5-7
Revenue Recognition Practice Exam
100 Multiple-Choice Questions with Answers and Detailed Rationales (ASC 606 Five-Step
Model)
Course D103 - Intermediate Accounting I (WGU)
Coverage Revenue Recognition, ASC 606 (Units 5-7): five-step model, performance
obligations, transaction price, allocation, recognition, and applications
Format 100 multiple-choice questions, four options each, with the correct answer and a
detailed rationale shown immediately after every question
Difficulty Mix Approximately 40% conceptual and 60% computational / applied
Suggested Time 3 hours 30 minutes (about 2.1 minutes per question)
Benchmark Score 80 or higher (80%) before attempting the Objective Assessment
How to Use This Exam
Work through the questions in each section as if it were a timed sitting, choosing one option before reading
further. Because the correct answer and a full rationale appear directly below each question, this edition is
designed for active study rather than silent test simulation: read the rationale even for items you answered
correctly, since it explains why the distractors fail and restates the rule the Objective Assessment expects you
to know. Track any question you miss and review its concept tag in your course material before retesting
yourself on that section.
SECTION A - The Five-Step Model and Scope (Questions 1-12)
Units 5-7 | 100 Questions with Answers and Rationales 1
, D103 INTERMEDIATE ACCOUNTING I | REVENUE RECOGNITION PRACTICE EXAM
1. Which option lists the five steps of the revenue recognition model in the correct
order?
A. Identify the contract, identify performance obligations, determine the
transaction price, recognize revenue, allocate the transaction price
B. Identify the contract, determine the transaction price, identify
performance obligations, allocate the transaction price, recognize revenue
C. Identify the contract, identify performance obligations, determine the
transaction price, allocate the transaction price, recognize revenue
D. Identify performance obligations, identify the contract, allocate the
transaction price, determine the transaction price, recognize revenue
Correct Answer: C | Concept: Five-Step Model | Question 1
Rationale. The five steps are executed in a strict sequence: (1) identify the contract with the customer, (2)
identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to
the performance obligations, and (5) recognize revenue when (or as) each performance obligation is
satisfied. Options A, B, and D all scramble this sequence, most commonly by recognizing revenue before
allocating the price, which is impossible because the allocation determines the amount assigned to each
obligation.
2. What is the core principle of ASC 606, Revenue from Contracts with
Customers?
A. Recognize revenue when cash is collected from the customer
B. Recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services
C. Recognize revenue when legal title passes to the customer in all
circumstances
D. Recognize revenue in the amount of the invoice price stated in the contract
Correct Answer: B | Concept: Core Principle | Question 2
Rationale. ASC 606 is built on a single core principle: revenue is recognized as control of goods or services
transfers to the customer, measured at the consideration the entity expects to be entitled to receive. Cash
collection (A) reflects the old installment method logic, legal title (C) is only one indicator of control, and
the stated invoice price (D) may be reduced by variable consideration such as discounts, rebates, and
concessions.
3. Which of the following contracts is EXCLUDED from the scope of ASC 606?
A. A contract to provide consulting services at an hourly rate
B. A contract to license software to a customer
Units 5-7 | 100 Questions with Answers and Rationales 2
AC C O U N T I N G I 2026 update
Revenue
Recognition
A complete 100-question practice exam
covering the ASC 606 revenue recognition
competencies of Units 5–7. Every question
includes the correct answer, a detailed
rationale, and the concept tag to review
before test day.
UNI T 5 UNI T 6 UNI T 7
100 Multiple-Choice Questions · Answers with
Rationales
ASC 606 Five-Step Model · Balanced Conceptual &
Computational · Updated 2026
,PRACTI CE EXAM O A2 · SELF- STUDY EDI TI O N
, WGU D103 | INTERMEDIATE ACCOUNTING I | UNITS 5-7
Revenue Recognition Practice Exam
100 Multiple-Choice Questions with Answers and Detailed Rationales (ASC 606 Five-Step
Model)
Course D103 - Intermediate Accounting I (WGU)
Coverage Revenue Recognition, ASC 606 (Units 5-7): five-step model, performance
obligations, transaction price, allocation, recognition, and applications
Format 100 multiple-choice questions, four options each, with the correct answer and a
detailed rationale shown immediately after every question
Difficulty Mix Approximately 40% conceptual and 60% computational / applied
Suggested Time 3 hours 30 minutes (about 2.1 minutes per question)
Benchmark Score 80 or higher (80%) before attempting the Objective Assessment
How to Use This Exam
Work through the questions in each section as if it were a timed sitting, choosing one option before reading
further. Because the correct answer and a full rationale appear directly below each question, this edition is
designed for active study rather than silent test simulation: read the rationale even for items you answered
correctly, since it explains why the distractors fail and restates the rule the Objective Assessment expects you
to know. Track any question you miss and review its concept tag in your course material before retesting
yourself on that section.
SECTION A - The Five-Step Model and Scope (Questions 1-12)
Units 5-7 | 100 Questions with Answers and Rationales 1
, D103 INTERMEDIATE ACCOUNTING I | REVENUE RECOGNITION PRACTICE EXAM
1. Which option lists the five steps of the revenue recognition model in the correct
order?
A. Identify the contract, identify performance obligations, determine the
transaction price, recognize revenue, allocate the transaction price
B. Identify the contract, determine the transaction price, identify
performance obligations, allocate the transaction price, recognize revenue
C. Identify the contract, identify performance obligations, determine the
transaction price, allocate the transaction price, recognize revenue
D. Identify performance obligations, identify the contract, allocate the
transaction price, determine the transaction price, recognize revenue
Correct Answer: C | Concept: Five-Step Model | Question 1
Rationale. The five steps are executed in a strict sequence: (1) identify the contract with the customer, (2)
identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to
the performance obligations, and (5) recognize revenue when (or as) each performance obligation is
satisfied. Options A, B, and D all scramble this sequence, most commonly by recognizing revenue before
allocating the price, which is impossible because the allocation determines the amount assigned to each
obligation.
2. What is the core principle of ASC 606, Revenue from Contracts with
Customers?
A. Recognize revenue when cash is collected from the customer
B. Recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services
C. Recognize revenue when legal title passes to the customer in all
circumstances
D. Recognize revenue in the amount of the invoice price stated in the contract
Correct Answer: B | Concept: Core Principle | Question 2
Rationale. ASC 606 is built on a single core principle: revenue is recognized as control of goods or services
transfers to the customer, measured at the consideration the entity expects to be entitled to receive. Cash
collection (A) reflects the old installment method logic, legal title (C) is only one indicator of control, and
the stated invoice price (D) may be reduced by variable consideration such as discounts, rebates, and
concessions.
3. Which of the following contracts is EXCLUDED from the scope of ASC 606?
A. A contract to provide consulting services at an hourly rate
B. A contract to license software to a customer
Units 5-7 | 100 Questions with Answers and Rationales 2
