WGU D102 FINANCIAL ACCOUNTING
COMPREHENSIVE EXAM QUESTIONS
AND ANSWERS 100% VERIFIED
2026/2027
1. Which of the following describes the impact on the accounting equation when a company
performs a service on account?
A. Assets increase; Liabilities increase
B. Assets decrease; Equity increases
C. Assets increase; Equity increases
D. Liabilities increase; Equity decreases
Answer: C
Conceptual Explanation: Performing a service on account increases Accounts Receivable
(Asset) and Service Revenue, which increases Retained Earnings (Equity).
2. A company purchased equipment for $50,000 with a salvage value of $5,000 and a useful
life of 5 years. Using the double-declining-balance method, what is the depreciation expense
for the second year?
A. $20,000
B. $12,000
,C. $10,800
D. $18,000
Answer: B
Conceptual Explanation: Year 1: $50,000 * 40% = $20,000. Year 2 Book Value: $50,000 -
$20,000 = $30,000. Year 2 Depreciation: $30,000 * 40% = $12,000.
3. Under the allowance method, which of the following is the correct entry to record the
write-off of a specific uncollectible account?
A. Debit Bad Debt Expense; Credit Accounts Receivable
B. Debit Allowance for Doubtful Accounts; Credit Bad Debt Expense
C. Debit Accounts Receivable; Credit Allowance for Doubtful Accounts
D. Debit Allowance for Doubtful Accounts; Credit Accounts Receivable
Answer: D
Conceptual Explanation: A write-off under the allowance method reduces the Allowance
for Doubtful Accounts and the specific Accounts Receivable asset; it does not affect the
income statement at the time of write-off.
4. Which financial statement reports the financial position of a business at a specific point in
time?
A. Income Statement
B. Statement of Retained Earnings
, C. Balance Sheet
D. Statement of Cash Flows
Answer: C
Conceptual Explanation: The Balance Sheet is a ‘snapshot’ of assets, liabilities, and equity
at a specific date, unlike the other statements which cover a period of time.
5. A company has a beginning inventory of $10,000, purchases of $40,000, and ending
inventory of $15,000. What is the Cost of Goods Sold (COGS)?
A. $25,000
B. $45,000
C. $55,000
D. $35,000
Answer: D
Conceptual Explanation: COGS = Beginning Inventory + Purchases - Ending Inventory.
$10,000 + $40,000 - $15,000 = $35,000.
6. Which of the following accounts is NOT closed at the end of the accounting period?
A. Dividends
B. Accumulated Depreciation
C. Service Revenue
COMPREHENSIVE EXAM QUESTIONS
AND ANSWERS 100% VERIFIED
2026/2027
1. Which of the following describes the impact on the accounting equation when a company
performs a service on account?
A. Assets increase; Liabilities increase
B. Assets decrease; Equity increases
C. Assets increase; Equity increases
D. Liabilities increase; Equity decreases
Answer: C
Conceptual Explanation: Performing a service on account increases Accounts Receivable
(Asset) and Service Revenue, which increases Retained Earnings (Equity).
2. A company purchased equipment for $50,000 with a salvage value of $5,000 and a useful
life of 5 years. Using the double-declining-balance method, what is the depreciation expense
for the second year?
A. $20,000
B. $12,000
,C. $10,800
D. $18,000
Answer: B
Conceptual Explanation: Year 1: $50,000 * 40% = $20,000. Year 2 Book Value: $50,000 -
$20,000 = $30,000. Year 2 Depreciation: $30,000 * 40% = $12,000.
3. Under the allowance method, which of the following is the correct entry to record the
write-off of a specific uncollectible account?
A. Debit Bad Debt Expense; Credit Accounts Receivable
B. Debit Allowance for Doubtful Accounts; Credit Bad Debt Expense
C. Debit Accounts Receivable; Credit Allowance for Doubtful Accounts
D. Debit Allowance for Doubtful Accounts; Credit Accounts Receivable
Answer: D
Conceptual Explanation: A write-off under the allowance method reduces the Allowance
for Doubtful Accounts and the specific Accounts Receivable asset; it does not affect the
income statement at the time of write-off.
4. Which financial statement reports the financial position of a business at a specific point in
time?
A. Income Statement
B. Statement of Retained Earnings
, C. Balance Sheet
D. Statement of Cash Flows
Answer: C
Conceptual Explanation: The Balance Sheet is a ‘snapshot’ of assets, liabilities, and equity
at a specific date, unlike the other statements which cover a period of time.
5. A company has a beginning inventory of $10,000, purchases of $40,000, and ending
inventory of $15,000. What is the Cost of Goods Sold (COGS)?
A. $25,000
B. $45,000
C. $55,000
D. $35,000
Answer: D
Conceptual Explanation: COGS = Beginning Inventory + Purchases - Ending Inventory.
$10,000 + $40,000 - $15,000 = $35,000.
6. Which of the following accounts is NOT closed at the end of the accounting period?
A. Dividends
B. Accumulated Depreciation
C. Service Revenue
