WGU D103 EXAM -INTERMEDIATE ACCOUNTING I
|ACTUAL QUESTIONS AND VERIFIED ANSWERS
|BRAND NEW 2026-2027 UPDATE|GRADED A+
Question 1
When the cost-of-goods-sold method is used adjust cost to "net
realizable value" in the lower-of-cost-and-net-realizable-value (LCNRV)
approach, what account is debited?
a. allowance to Reduce Inventory to Market Value.
b. Inventory.
c. Cost of Goods Sold.
d. Loss Due to Market Decline of Inventory to NRV.
CORRECT ANSWER
c. cost of goods sold
Question 2
The percentage markup on cost can be computed by dividing gross
profit on selling price by 100%:
a. minus gross profit on selling price.
b. plus markup on cost.
c. plus gross profit on selling price.
d. minus markup on cost.
CORRECT ANSWER
A. minus gross profit on selling price
1
,Question 3
Which of the following is included in the calculation of the cost-to-retail
ratio under the conventional retail inventory method?
a. Markups and markup cancellations.
b. Markdowns only.
c. Markups only.
d. Markdowns and markdown cancellations.
CORRECT ANSWER
A. markups and markup cancellations
Question 4
In no case can "market" in the lower-of-cost-or-market rule be more
than
a. estimated selling price in the ordinary course of business.
b. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal and an
allowance for an approximately normal profit margin.
c. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal.
d. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal, an
allowance for an approximately normal profit margin, and an
adequate reserve for possible future losses.
CORRECT ANSWER
C. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal.
2
, Question 5
When net realizable value is lower than cost, and using the lower-of cost-and-net-
realizable approach and the allowance account is used to
recording the write-down, what account is credited?
a. Cost of Goods Sold.
b. Allowance to Reduce Inventory to Market.
c. A loss account.
d. Inventory.
CORRECT ANSWER
B. allowance to reduce inventory to market
Question 6
The replacement cost of an inventory item is $75. Net realizable value
is $82.50. Net realizable value less a normal profit margin is $69. The
cost of the item is $76.50. The inventory item would be valued at:
a. $69.
b. $75.
c. $82.50.
d. $76.50.
CORRECT ANSWER
B. $75
Question 7
3
|ACTUAL QUESTIONS AND VERIFIED ANSWERS
|BRAND NEW 2026-2027 UPDATE|GRADED A+
Question 1
When the cost-of-goods-sold method is used adjust cost to "net
realizable value" in the lower-of-cost-and-net-realizable-value (LCNRV)
approach, what account is debited?
a. allowance to Reduce Inventory to Market Value.
b. Inventory.
c. Cost of Goods Sold.
d. Loss Due to Market Decline of Inventory to NRV.
CORRECT ANSWER
c. cost of goods sold
Question 2
The percentage markup on cost can be computed by dividing gross
profit on selling price by 100%:
a. minus gross profit on selling price.
b. plus markup on cost.
c. plus gross profit on selling price.
d. minus markup on cost.
CORRECT ANSWER
A. minus gross profit on selling price
1
,Question 3
Which of the following is included in the calculation of the cost-to-retail
ratio under the conventional retail inventory method?
a. Markups and markup cancellations.
b. Markdowns only.
c. Markups only.
d. Markdowns and markdown cancellations.
CORRECT ANSWER
A. markups and markup cancellations
Question 4
In no case can "market" in the lower-of-cost-or-market rule be more
than
a. estimated selling price in the ordinary course of business.
b. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal and an
allowance for an approximately normal profit margin.
c. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal.
d. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal, an
allowance for an approximately normal profit margin, and an
adequate reserve for possible future losses.
CORRECT ANSWER
C. estimated selling price in the ordinary course of business less
reasonably predictable costs of completion and disposal.
2
, Question 5
When net realizable value is lower than cost, and using the lower-of cost-and-net-
realizable approach and the allowance account is used to
recording the write-down, what account is credited?
a. Cost of Goods Sold.
b. Allowance to Reduce Inventory to Market.
c. A loss account.
d. Inventory.
CORRECT ANSWER
B. allowance to reduce inventory to market
Question 6
The replacement cost of an inventory item is $75. Net realizable value
is $82.50. Net realizable value less a normal profit margin is $69. The
cost of the item is $76.50. The inventory item would be valued at:
a. $69.
b. $75.
c. $82.50.
d. $76.50.
CORRECT ANSWER
B. $75
Question 7
3
