WGU D105 INTERMEDIATE ACCOUNTING 3 |PA| PRE-
ASSEMENT EXAM
Correct
Incorrect
1 of 34
Term
A company discovers an error from the prior year, where a bad debt
was materially understated.
Which partial journal entry should be made in the current year to
correct the error?
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Debit Bad Debt Expense Debit Net Income
Debit Retained Earnings Credit Retained Earnings
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2 of 34
Term
,A lessee leases a piece of equipment from a lessor, under lease
terms that qualify as an operating lease. The present value of
required rental payments is $280,000, and the present value of the
estimated residual value, which is unguaranteed, is $30,000. The
lessor incurred total costs of $160,000 to build the leased asset.
Which amount of lease liability should the lessee record?
Give this one a try later!
depreciation expense $2,000
$0
($10,000/5) (total lease sum / years)
$51,604 (60,000-8396) (cost-present $280,000 (Present value of
value of residual value) rental payments)
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3 of 34
Term
A company provides a pension plan to eligible new hires and bears
all the costs. Funding the plan by the employer during a recession
may prove to be challenging due to the requirement to make up for
asset shortfalls. However, when the economy is strong, the
employer may benefit from excess accumulations. Which type of
plan is described in the scenario?
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, Defined Benefit Plan (pension) 403(b)
Defined Contribution Plan (401K) Traditional ira
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4 of 34
Term
Which journal entry should the lessee use to record the first year's
payment?
Give this one a try later!
Debit Rent Expense; Credit Lease Debit Interest Expense; Debit
Liability; Credit Cash Lease Liability; Credit Cash
Debit Retained Earnings For $8,000;
Debit Accounts Receivable For
Credit Accounts Receivable For
$20,000; Credit Sales For $20,000
$8,000
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5 of 34
Term
The company is creating a Year 3 statement of cash flows using the
indirect method. The company issued 1,000 shares of common stock.
The company's information is as follows:
, Comparative Balance Sheets
Assets
Year 3
Year 2
Year 1
Cash
$35,000
$30,000
$25,000
Accounts receivable
45,000
40,000
50,000
Prepaid expenses
20,000
30,000
25,000
Equipment
70,000
80,000
100,000
Accumulated depreciation - equipment
ASSEMENT EXAM
Correct
Incorrect
1 of 34
Term
A company discovers an error from the prior year, where a bad debt
was materially understated.
Which partial journal entry should be made in the current year to
correct the error?
Give this one a try later!
Debit Bad Debt Expense Debit Net Income
Debit Retained Earnings Credit Retained Earnings
Don't know?
2 of 34
Term
,A lessee leases a piece of equipment from a lessor, under lease
terms that qualify as an operating lease. The present value of
required rental payments is $280,000, and the present value of the
estimated residual value, which is unguaranteed, is $30,000. The
lessor incurred total costs of $160,000 to build the leased asset.
Which amount of lease liability should the lessee record?
Give this one a try later!
depreciation expense $2,000
$0
($10,000/5) (total lease sum / years)
$51,604 (60,000-8396) (cost-present $280,000 (Present value of
value of residual value) rental payments)
Don't know?
3 of 34
Term
A company provides a pension plan to eligible new hires and bears
all the costs. Funding the plan by the employer during a recession
may prove to be challenging due to the requirement to make up for
asset shortfalls. However, when the economy is strong, the
employer may benefit from excess accumulations. Which type of
plan is described in the scenario?
Give this one a try later!
, Defined Benefit Plan (pension) 403(b)
Defined Contribution Plan (401K) Traditional ira
Don't know?
4 of 34
Term
Which journal entry should the lessee use to record the first year's
payment?
Give this one a try later!
Debit Rent Expense; Credit Lease Debit Interest Expense; Debit
Liability; Credit Cash Lease Liability; Credit Cash
Debit Retained Earnings For $8,000;
Debit Accounts Receivable For
Credit Accounts Receivable For
$20,000; Credit Sales For $20,000
$8,000
Don't know?
5 of 34
Term
The company is creating a Year 3 statement of cash flows using the
indirect method. The company issued 1,000 shares of common stock.
The company's information is as follows:
, Comparative Balance Sheets
Assets
Year 3
Year 2
Year 1
Cash
$35,000
$30,000
$25,000
Accounts receivable
45,000
40,000
50,000
Prepaid expenses
20,000
30,000
25,000
Equipment
70,000
80,000
100,000
Accumulated depreciation - equipment
