WGU D104 INTERMEDIATE ACCOUNTING II UNITS 4-6 QUESTIONS & ANS… EXAM
P R O F E S S I O N A L P R A C T I C E M AT E R I A L S
WGU D104 Intermediate
Accounting II Units 4-6
Questions & Answers
2026-2027 | Updated
Edition
Verified Answers Exam Ready With Rationales
144 QUESTIONS
DOCUMENT OVERVIEW
This document contains 144 verified questions with correct answers provided, focusing on
intermediate accounting principles. It serves as a comprehensive resource for understanding key
financial concepts and practices. Students can utilize it for effective study, review, and preparation
for certification exams in accounting.
CONTENTS
• Financial Ratios • Depreciation Methods
• Impairment and Depletion • Liabilities and Notes
• Contingencies and Liabilities • Bonds and Interest
• Stockholders' Equity • Dividends and Stock Splits
• Stock Options and Compensation • Earnings Per Share
Page 1
, E XA M Q U EST I O N S
Q1 QUESTION 1 OF 144
Asset Turnover Ratio
CORRECT ANSWER
net sales/average total assets
Q2 QUESTION 2 OF 144
Profit Margin Ratio
CORRECT ANSWER
net income/total sales
Q3 QUESTION 3 OF 144
Rate of return on assets
CORRECT ANSWER
net income/average total assets
Q4 QUESTION 4 OF 144
Current ratio
CORRECT ANSWER
current assets/current liabilities
Q5 QUESTION 5 OF 144
acid-test ratio
Page 2
, CORRECT ANSWER
(cash + short-term investments + net receivables) / current liabilities
Q6 QUESTION 6 OF 144
rate of return on common stock equity
CORRECT ANSWER
(net income - preferred dividends) / average common stockholders' equity
Q7 QUESTION 7 OF 144
payout ratio
CORRECT ANSWER
cash dividends / (net income - preferred dividends)
Q8 QUESTION 8 OF 144
book value per share
CORRECT ANSWER
common stockholders' equity / outstanding shares
Q9 QUESTION 9 OF 144
Journal entry for gain on sale of composite depreciation equipment
CORRECT ANSWER
Debit cash & accumulated depreciation (subtract gain), credit equipment.
Q10 QUESTION 10 OF 144
Premium on bonds payable is what kind of liability
Page 3
, CORRECT ANSWER
Long term liability
Q11 QUESTION 11 OF 144
Times interest earned ratio
CORRECT ANSWER
(Net Income + Interest Expense + Income Tax Expense) / Interest Expense
Q12 QUESTION 12 OF 144
Times interest earned ratio measures what
CORRECT ANSWER
The ability of a company to pay its debt obligations. It indicates the margin of safety provided to
creditors.
Q13 QUESTION 13 OF 144
Debt to assets ratio
CORRECT ANSWER
total liabilities / total assets
Q14 QUESTION 14 OF 144
Debt equity ratio
CORRECT ANSWER
total liabilities/total equity
Q15 QUESTION 15 OF 144
Employee stock purchase plans generally permit all employees to purchase stock at a discounted
price for a short period of time. These plans are compensatory unless
Page 4
P R O F E S S I O N A L P R A C T I C E M AT E R I A L S
WGU D104 Intermediate
Accounting II Units 4-6
Questions & Answers
2026-2027 | Updated
Edition
Verified Answers Exam Ready With Rationales
144 QUESTIONS
DOCUMENT OVERVIEW
This document contains 144 verified questions with correct answers provided, focusing on
intermediate accounting principles. It serves as a comprehensive resource for understanding key
financial concepts and practices. Students can utilize it for effective study, review, and preparation
for certification exams in accounting.
CONTENTS
• Financial Ratios • Depreciation Methods
• Impairment and Depletion • Liabilities and Notes
• Contingencies and Liabilities • Bonds and Interest
• Stockholders' Equity • Dividends and Stock Splits
• Stock Options and Compensation • Earnings Per Share
Page 1
, E XA M Q U EST I O N S
Q1 QUESTION 1 OF 144
Asset Turnover Ratio
CORRECT ANSWER
net sales/average total assets
Q2 QUESTION 2 OF 144
Profit Margin Ratio
CORRECT ANSWER
net income/total sales
Q3 QUESTION 3 OF 144
Rate of return on assets
CORRECT ANSWER
net income/average total assets
Q4 QUESTION 4 OF 144
Current ratio
CORRECT ANSWER
current assets/current liabilities
Q5 QUESTION 5 OF 144
acid-test ratio
Page 2
, CORRECT ANSWER
(cash + short-term investments + net receivables) / current liabilities
Q6 QUESTION 6 OF 144
rate of return on common stock equity
CORRECT ANSWER
(net income - preferred dividends) / average common stockholders' equity
Q7 QUESTION 7 OF 144
payout ratio
CORRECT ANSWER
cash dividends / (net income - preferred dividends)
Q8 QUESTION 8 OF 144
book value per share
CORRECT ANSWER
common stockholders' equity / outstanding shares
Q9 QUESTION 9 OF 144
Journal entry for gain on sale of composite depreciation equipment
CORRECT ANSWER
Debit cash & accumulated depreciation (subtract gain), credit equipment.
Q10 QUESTION 10 OF 144
Premium on bonds payable is what kind of liability
Page 3
, CORRECT ANSWER
Long term liability
Q11 QUESTION 11 OF 144
Times interest earned ratio
CORRECT ANSWER
(Net Income + Interest Expense + Income Tax Expense) / Interest Expense
Q12 QUESTION 12 OF 144
Times interest earned ratio measures what
CORRECT ANSWER
The ability of a company to pay its debt obligations. It indicates the margin of safety provided to
creditors.
Q13 QUESTION 13 OF 144
Debt to assets ratio
CORRECT ANSWER
total liabilities / total assets
Q14 QUESTION 14 OF 144
Debt equity ratio
CORRECT ANSWER
total liabilities/total equity
Q15 QUESTION 15 OF 144
Employee stock purchase plans generally permit all employees to purchase stock at a discounted
price for a short period of time. These plans are compensatory unless
Page 4
