WGU D104 INTERMEDIATE ACCOUNTING II
ACTUAL TEST QUESTIONS AND SOLVED
ANSWERS
◉ Activity Method.
Answer: A depreciation method in which depreciation is a function
of use or productivity instead of the passage of time.
◉ Additions.
Answer: Expenditures on assets which increase or extend them.
◉ Amortization.
Answer: The accounting process of allocating the cost of intangible
assets (i.e., patents and goodwill) to expense.
◉ Antidilutive Securities.
Answer: Securities which upon conversion or exercise increase
earnings per share (or reduce the loss per share).
◉ Asset Turnover.
,Answer: A ratio that gives the dollars of sales produced by each
dollar invested; calculated by dividing net sales by average total
assets for the period.
◉ Assurance-type Warranty.
Answer: Warranty that the product meets agreed-upon
specifications in the contract at the time the product is sold.
◉ Avoidable Interest.
Answer: The amount of interest cost during the period that a
company could theoretically avoid if it had not made expenditures
for the asset.
◉ Bargain Purchase.
Answer: Occurs when the fair market value of the assets acquired is
higher than the purchase price of the assets.
◉ Basic EPS.
Answer: The income earned by each share of common stock.
◉ Bearer.
Answer: Bonds not recorded in the name of the owner and may be
transferred from one owner to another by mere delivery.
, ◉ Callable Bonds.
Answer: Bonds that give the issuer the right to call and retire the
bonds prior to maturity.
◉ Callable Preferred Stock.
Answer: Preferred stock that grants the issuer the right to purchase
the stock from stockholders at specified future dates and prices.
◉ Capital Expenditure (Asset).
Answer: An expenditure on an asset whereby (1) the useful life of
the asset is increased, (2) the quantity of units produced from the
asset is increased, or (3) the quality of the units produced is
enhanced.
◉ Capitalization Period.
Answer: The period of time during which a company must capitalize
interest.
◉ Carrying Value.
Answer: The book value.
◉ Cash Dividend Payable.
Answer: An amount to be paid in cash owed by a corporation to its
stockholders as a result of board of directors' authorization.
ACTUAL TEST QUESTIONS AND SOLVED
ANSWERS
◉ Activity Method.
Answer: A depreciation method in which depreciation is a function
of use or productivity instead of the passage of time.
◉ Additions.
Answer: Expenditures on assets which increase or extend them.
◉ Amortization.
Answer: The accounting process of allocating the cost of intangible
assets (i.e., patents and goodwill) to expense.
◉ Antidilutive Securities.
Answer: Securities which upon conversion or exercise increase
earnings per share (or reduce the loss per share).
◉ Asset Turnover.
,Answer: A ratio that gives the dollars of sales produced by each
dollar invested; calculated by dividing net sales by average total
assets for the period.
◉ Assurance-type Warranty.
Answer: Warranty that the product meets agreed-upon
specifications in the contract at the time the product is sold.
◉ Avoidable Interest.
Answer: The amount of interest cost during the period that a
company could theoretically avoid if it had not made expenditures
for the asset.
◉ Bargain Purchase.
Answer: Occurs when the fair market value of the assets acquired is
higher than the purchase price of the assets.
◉ Basic EPS.
Answer: The income earned by each share of common stock.
◉ Bearer.
Answer: Bonds not recorded in the name of the owner and may be
transferred from one owner to another by mere delivery.
, ◉ Callable Bonds.
Answer: Bonds that give the issuer the right to call and retire the
bonds prior to maturity.
◉ Callable Preferred Stock.
Answer: Preferred stock that grants the issuer the right to purchase
the stock from stockholders at specified future dates and prices.
◉ Capital Expenditure (Asset).
Answer: An expenditure on an asset whereby (1) the useful life of
the asset is increased, (2) the quantity of units produced from the
asset is increased, or (3) the quality of the units produced is
enhanced.
◉ Capitalization Period.
Answer: The period of time during which a company must capitalize
interest.
◉ Carrying Value.
Answer: The book value.
◉ Cash Dividend Payable.
Answer: An amount to be paid in cash owed by a corporation to its
stockholders as a result of board of directors' authorization.
