WESTERN GOVERNORS UNIVERSITY · COLLEGE OF BUSINESS
WGU D104 Units 4-6
Journal Entries Practice
Comprehensive Review — All Journal Entry Scenarios
Topics: Depreciation, Impairment, Depletion, Liabilities, Bonds, Dividends,
Stock & Warranties
Edition 1 · September 2026
Table of Contents
1. Instructions for Use 2
2. Practice Questions with Answers & Rationales — Journal Entries 2
WGU D104 · Western Governors University Page 1
,WGU D104 JOURNAL ENTRIES PRACTICE GUIDE INSTRUCTIONS & PRACTICE QUESTIONS
How to Use This Guide
This comprehensive review contains 75 practice questions covering all journal entry scenarios
from WGU D104 Units 4-6. Each question includes four answer choices, a clearly marked
correct answer, and a detailed rationale explaining the journal entry and its accounting
treatment.
Category: Journal Entries — Depreciation, Impairment, Depletion,
Liabilities, Bonds, Dividends, Stock & Warranties
1 What is the correct journal entry for a gain on sale of composite depreciation
equipment?
A Debit Cash, credit Equipment, credit Gain on Sale
B Debit Cash, debit Equipment, credit Accumulated Depreciation
C Debit Cash, debit Accumulated Depreciation (less gain), credit Equipment
D Debit Cash, credit Accumulated Depreciation, credit Equipment
Why C is correct: Under the composite depreciation method, when an asset is sold, the
journal entry is: Debit Cash for the proceeds, Debit Accumulated Depreciation for the
amount that brings the total credits equal to debits (the gain is effectively netted in the
credit to Equipment), and Credit Equipment for the full cost.
A — Gains are not separately recognized in composite depreciation.
B — Equipment should be credited, not debited.
D — Accumulated Depreciation is debited, not credited.
,2 What is the correct journal entry to record an impairment?
A Debit Asset, Credit Impairment Loss
B Debit Impairment Loss, Credit Accumulated Depreciation
C Debit Accumulated Depreciation, Credit Impairment Loss
D Debit Impairment Loss, Credit Cash
Why B is correct: The journal entry for an impairment loss is: Debit Impairment Loss (or
Loss on Impairment) and Credit Accumulated Depreciation (or the asset directly), which
reduces the carrying amount of the asset to its fair value.
A — Asset should be credited, not debited.
C — This is the reverse of the correct entry.
D — Cash is not involved in an impairment.
3 What is the journal entry to record ore extracted?
A Debit Depletion Expense, Credit Mineral Mine
B Debit Inventory (ore), Credit Mineral Mine
C Debit Cost of Goods Sold, Credit Inventory
D Debit Mineral Mine, Credit Inventory
Why B is correct: When ore is extracted, the entry is: Debit Inventory (ore) and Credit
Mineral Mine (or Accumulated Depletion), capitalizing the cost of the extracted resource
into inventory.
A — Depletion Expense is recorded when the resource is used.
C — Cost of Goods Sold is recorded when the ore is sold.
D — This is the reverse of the correct entry.
, 4 What is the journal entry to record the ore sold?
A Debit Inventory, Credit Cost of Goods Sold
B Debit Cost of Goods Sold, Credit Inventory (ore)
C Debit Cost of Goods Sold, Credit Mineral Mine
D Debit Inventory, Credit Mineral Mine
Why B is correct: When ore is sold, the entry is: Debit Cost of Goods Sold and Credit
Inventory (ore), recognizing the expense of the resources sold.
A — This is the reverse of the correct entry.
C — The credit should be to Inventory, not Mineral Mine.
D — This is the entry for ore extracted, not sold.
5 What is the journal entry to record depletion expense of a mine?
A Debit Depletion Expense, Credit Mineral Mine
B Debit Depletion Expense, Credit Accumulated Depletion
C Debit Accumulated Depletion, Credit Depletion Expense
D Debit Mineral Mine, Credit Depletion Expense
Why B is correct: The journal entry to record depletion expense is: Debit Depletion Expense
and Credit Accumulated Depletion (or directly credit the asset account).
A — A contra-asset account (Accumulated Depletion) is used.
C — This is the reverse of the correct entry.
D — This is the reverse of the correct entry.
WGU D104 Units 4-6
Journal Entries Practice
Comprehensive Review — All Journal Entry Scenarios
Topics: Depreciation, Impairment, Depletion, Liabilities, Bonds, Dividends,
Stock & Warranties
Edition 1 · September 2026
Table of Contents
1. Instructions for Use 2
2. Practice Questions with Answers & Rationales — Journal Entries 2
WGU D104 · Western Governors University Page 1
,WGU D104 JOURNAL ENTRIES PRACTICE GUIDE INSTRUCTIONS & PRACTICE QUESTIONS
How to Use This Guide
This comprehensive review contains 75 practice questions covering all journal entry scenarios
from WGU D104 Units 4-6. Each question includes four answer choices, a clearly marked
correct answer, and a detailed rationale explaining the journal entry and its accounting
treatment.
Category: Journal Entries — Depreciation, Impairment, Depletion,
Liabilities, Bonds, Dividends, Stock & Warranties
1 What is the correct journal entry for a gain on sale of composite depreciation
equipment?
A Debit Cash, credit Equipment, credit Gain on Sale
B Debit Cash, debit Equipment, credit Accumulated Depreciation
C Debit Cash, debit Accumulated Depreciation (less gain), credit Equipment
D Debit Cash, credit Accumulated Depreciation, credit Equipment
Why C is correct: Under the composite depreciation method, when an asset is sold, the
journal entry is: Debit Cash for the proceeds, Debit Accumulated Depreciation for the
amount that brings the total credits equal to debits (the gain is effectively netted in the
credit to Equipment), and Credit Equipment for the full cost.
A — Gains are not separately recognized in composite depreciation.
B — Equipment should be credited, not debited.
D — Accumulated Depreciation is debited, not credited.
,2 What is the correct journal entry to record an impairment?
A Debit Asset, Credit Impairment Loss
B Debit Impairment Loss, Credit Accumulated Depreciation
C Debit Accumulated Depreciation, Credit Impairment Loss
D Debit Impairment Loss, Credit Cash
Why B is correct: The journal entry for an impairment loss is: Debit Impairment Loss (or
Loss on Impairment) and Credit Accumulated Depreciation (or the asset directly), which
reduces the carrying amount of the asset to its fair value.
A — Asset should be credited, not debited.
C — This is the reverse of the correct entry.
D — Cash is not involved in an impairment.
3 What is the journal entry to record ore extracted?
A Debit Depletion Expense, Credit Mineral Mine
B Debit Inventory (ore), Credit Mineral Mine
C Debit Cost of Goods Sold, Credit Inventory
D Debit Mineral Mine, Credit Inventory
Why B is correct: When ore is extracted, the entry is: Debit Inventory (ore) and Credit
Mineral Mine (or Accumulated Depletion), capitalizing the cost of the extracted resource
into inventory.
A — Depletion Expense is recorded when the resource is used.
C — Cost of Goods Sold is recorded when the ore is sold.
D — This is the reverse of the correct entry.
, 4 What is the journal entry to record the ore sold?
A Debit Inventory, Credit Cost of Goods Sold
B Debit Cost of Goods Sold, Credit Inventory (ore)
C Debit Cost of Goods Sold, Credit Mineral Mine
D Debit Inventory, Credit Mineral Mine
Why B is correct: When ore is sold, the entry is: Debit Cost of Goods Sold and Credit
Inventory (ore), recognizing the expense of the resources sold.
A — This is the reverse of the correct entry.
C — The credit should be to Inventory, not Mineral Mine.
D — This is the entry for ore extracted, not sold.
5 What is the journal entry to record depletion expense of a mine?
A Debit Depletion Expense, Credit Mineral Mine
B Debit Depletion Expense, Credit Accumulated Depletion
C Debit Accumulated Depletion, Credit Depletion Expense
D Debit Mineral Mine, Credit Depletion Expense
Why B is correct: The journal entry to record depletion expense is: Debit Depletion Expense
and Credit Accumulated Depletion (or directly credit the asset account).
A — A contra-asset account (Accumulated Depletion) is used.
C — This is the reverse of the correct entry.
D — This is the reverse of the correct entry.
