WGU D774 INTRO TO BUSINESS ACCOUNTING OA
(LATEST 2026/2027 UPDATE) QUESTIONS AND
VERIFIED ANSWERS 100% CORRECT GRADE A
50 QUESTIONS
TABLE OF CONTENTS
# TOPIC
1 Apply the accounting cycle to record, adjust, and close transactions under accrual and cash bases
2 Prepare and interpret the four primary financial statements in accordance with GAAP
3 Analyze business transactions using ratio analysis, horizontal, and vertical techniques
4 Evaluate internal control procedures and ethical considerations in financial reporting
5 Compute inventory, depreciation, and liability amounts using multiple accepted methods
6 WGU D774 Intro to Business Accounting OA
7 Latest 2026
8 2027 Update
9 Questions and Verified Answers 100% Correct Grade A
10 Foundations of Business Accounting / Financial & Managerial Accounting
11 Applied Business Accounting / Financial & Managerial Accounting
12 Advanced Business Accounting / Financial & Managerial Accounting
13 Business Accounting / Financial & Managerial Accounting Review
ABSTRACT
Page 1
,This study document brings together 50 carefully worded exam questions drawn from WGU D774
Intro to Business Accounting OA (Latest 2026/2027 Update) Questions and Verified Answers 100%
Correct Grade A, with the strongest emphasis placed on Apply the accounting cycle to record,
adjust, and close transactions under accrual and cash bases, Prepare and interpret the four
primary financial statements in accordance with GAAP, Analyze business transactions using ratio
analysis, horizontal and and vertical techniques. Every item follows the wording style and level of
reasoning you meet in the real paper, and each one is paired with a clear rationale so the correct
choice is never a guess. Work through the set at your own pace, mark the questions that slow you
down, then come back to them until the reasoning feels automatic. Learners who revise this way
walk into the exam room recognising the pattern behind the questions instead of meeting them for
the first time. Keep going - steady, honest practice is what turns a difficult paper into a comfortable
pass.
Q1 APPLY THE ACCOUNTING CYCLE TO RECORD, ADJUST, AND CLOSE TRANSACTIONS
UNDER ACCRUAL AND CASH BASES
A company uses a perpetual inventory system. It sells goods costing $4,200 for
$7,500 on account with terms 2/10, n/30. The customer pays within the discount
period. Which journal entry correctly records the cash receipt under the gross
method?
A. Debit Cash $7,350; Debit Sales Discounts $150; Credit Accounts Receivable $7,500
CORRECT
B. Debit Cash $7,500; Credit Accounts Receivable $7,500
C. Debit Cash $7,350; Credit Accounts Receivable $7,350
D. Debit Cash $7,500; Debit Sales Discounts $150; Credit Accounts Receivable $7,650
RATIONALE: Under the gross method, sales are initially recorded at full price; when payment
occurs within the discount period, Cash is debited for the net amount ($7,500 × 0.98 = $7,350),
Sales Discounts is debited for $150, and Accounts Receivable is credited for the full $7,500.
Option B ignores the discount, C incorrectly reduces A/R by the discounted amount, and D
misstates the receivable and discount.
Page 2
, Q2 APPLY THE ACCOUNTING CYCLE TO RECORD, ADJUST, AND CLOSE TRANSACTIONS
UNDER ACCRUAL AND CASH BASES
A company reports net income of $180,000, depreciation expense of $25,000, and
an increase in accounts receivable of $12,000. Using the indirect method, what is
cash provided by operating activities?
A. $193,000 CORRECT
B. $167,000
C. $180,000
D. $217,000
RATIONALE: Under the indirect method, start with net income ($180,000), add back non-cash
depreciation ($25,000), and subtract the increase in accounts receivable ($12,000) because
revenue exceeded cash collections. This yields $180,000 + $25,000 $12,000 = $193,000.
Options B, C, and D misapply the adjustments.
Q3 APPLY THE ACCOUNTING CYCLE TO RECORD, ADJUST, AND CLOSE TRANSACTIONS
UNDER ACCRUAL AND CASH BASES
A company's beginning inventory is $30,000, purchases are $120,000, and ending
inventory is $25,000. If cost of goods sold is $125,000, what is the amount of
inventory shrinkage or error?
A. $0 (no shrinkage) CORRECT
B. $5,000 shrinkage
C. $5,000 overstatement of ending inventory
D. $10,000 shrinkage
RATIONALE: Cost of goods available for sale = $30,000 + $120,000 = $150,000. If ending
inventory is $25,000, COGS should be $125,000, which matches the reported COGS. Therefore,
no shrinkage or error exists. Options B, C, and D reflect miscalculations or misinterpretations of
the relationship.
Page 3
(LATEST 2026/2027 UPDATE) QUESTIONS AND
VERIFIED ANSWERS 100% CORRECT GRADE A
50 QUESTIONS
TABLE OF CONTENTS
# TOPIC
1 Apply the accounting cycle to record, adjust, and close transactions under accrual and cash bases
2 Prepare and interpret the four primary financial statements in accordance with GAAP
3 Analyze business transactions using ratio analysis, horizontal, and vertical techniques
4 Evaluate internal control procedures and ethical considerations in financial reporting
5 Compute inventory, depreciation, and liability amounts using multiple accepted methods
6 WGU D774 Intro to Business Accounting OA
7 Latest 2026
8 2027 Update
9 Questions and Verified Answers 100% Correct Grade A
10 Foundations of Business Accounting / Financial & Managerial Accounting
11 Applied Business Accounting / Financial & Managerial Accounting
12 Advanced Business Accounting / Financial & Managerial Accounting
13 Business Accounting / Financial & Managerial Accounting Review
ABSTRACT
Page 1
,This study document brings together 50 carefully worded exam questions drawn from WGU D774
Intro to Business Accounting OA (Latest 2026/2027 Update) Questions and Verified Answers 100%
Correct Grade A, with the strongest emphasis placed on Apply the accounting cycle to record,
adjust, and close transactions under accrual and cash bases, Prepare and interpret the four
primary financial statements in accordance with GAAP, Analyze business transactions using ratio
analysis, horizontal and and vertical techniques. Every item follows the wording style and level of
reasoning you meet in the real paper, and each one is paired with a clear rationale so the correct
choice is never a guess. Work through the set at your own pace, mark the questions that slow you
down, then come back to them until the reasoning feels automatic. Learners who revise this way
walk into the exam room recognising the pattern behind the questions instead of meeting them for
the first time. Keep going - steady, honest practice is what turns a difficult paper into a comfortable
pass.
Q1 APPLY THE ACCOUNTING CYCLE TO RECORD, ADJUST, AND CLOSE TRANSACTIONS
UNDER ACCRUAL AND CASH BASES
A company uses a perpetual inventory system. It sells goods costing $4,200 for
$7,500 on account with terms 2/10, n/30. The customer pays within the discount
period. Which journal entry correctly records the cash receipt under the gross
method?
A. Debit Cash $7,350; Debit Sales Discounts $150; Credit Accounts Receivable $7,500
CORRECT
B. Debit Cash $7,500; Credit Accounts Receivable $7,500
C. Debit Cash $7,350; Credit Accounts Receivable $7,350
D. Debit Cash $7,500; Debit Sales Discounts $150; Credit Accounts Receivable $7,650
RATIONALE: Under the gross method, sales are initially recorded at full price; when payment
occurs within the discount period, Cash is debited for the net amount ($7,500 × 0.98 = $7,350),
Sales Discounts is debited for $150, and Accounts Receivable is credited for the full $7,500.
Option B ignores the discount, C incorrectly reduces A/R by the discounted amount, and D
misstates the receivable and discount.
Page 2
, Q2 APPLY THE ACCOUNTING CYCLE TO RECORD, ADJUST, AND CLOSE TRANSACTIONS
UNDER ACCRUAL AND CASH BASES
A company reports net income of $180,000, depreciation expense of $25,000, and
an increase in accounts receivable of $12,000. Using the indirect method, what is
cash provided by operating activities?
A. $193,000 CORRECT
B. $167,000
C. $180,000
D. $217,000
RATIONALE: Under the indirect method, start with net income ($180,000), add back non-cash
depreciation ($25,000), and subtract the increase in accounts receivable ($12,000) because
revenue exceeded cash collections. This yields $180,000 + $25,000 $12,000 = $193,000.
Options B, C, and D misapply the adjustments.
Q3 APPLY THE ACCOUNTING CYCLE TO RECORD, ADJUST, AND CLOSE TRANSACTIONS
UNDER ACCRUAL AND CASH BASES
A company's beginning inventory is $30,000, purchases are $120,000, and ending
inventory is $25,000. If cost of goods sold is $125,000, what is the amount of
inventory shrinkage or error?
A. $0 (no shrinkage) CORRECT
B. $5,000 shrinkage
C. $5,000 overstatement of ending inventory
D. $10,000 shrinkage
RATIONALE: Cost of goods available for sale = $30,000 + $120,000 = $150,000. If ending
inventory is $25,000, COGS should be $125,000, which matches the reported COGS. Therefore,
no shrinkage or error exists. Options B, C, and D reflect miscalculations or misinterpretations of
the relationship.
Page 3
