WGU D103 Intermediate Accounting I OBJECTIVE ASSESSMENT ACTUAL EXAM STUDY GUIDE 2025/2026 ACCURATE QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES || 100% GUARANTEED PASS BRAND NEW VERSION

WGU D103 Intermediate Accounting I OBJECTIVE ASSESSMENT ACTUAL EXAM STUDY GUIDE 2025/2026 ACCURATE QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES || 100% GUARANTEED PASS BRAND NEW VERSION 1. APB Opinions - ANSWER The APB's official pronouncements issued from 1959 through 1973 which were intended to be based mainly on research studies and be supported by reasons and analysis. 2. Accounting Principles Board (APB) - ANSWER An accounting rule making board which provided official pronouncements, called APB Opinions, from 1959 through 1973. 3. Accounting Research Bulletins - ANSWER Pronouncements issued by CAP dealing with a variety of timely accounting problems during the years 1939 to 1959. 4. Accrued Expenses - ANSWER Expenses incurred but not yet paid. 5. Accrued Revenues - ANSWER Revenues for which the performance obligation has been satisfied, but for which cash has not yet been received. 6. Adjusted Trial Balance - ANSWER A trial balance prepared immediately after all adjustments have been posted. 7. Adjusting Entries - ANSWER Entries made at the end of an accounting period to bring all accounts up to date on an accrual accounting basis. 8. American Institute of Certified Public Accountants (AICPA) - ANSWER The national professional organization of practicing Certified Public Accountants. 9. Book Value - ANSWER The difference between the cost of an asset and its related accumulated depreciation. 10. Closing Process - ANSWER The formal process by which all nominal accounts are reduced to zero to prepare the accounts for the next period's transactions. 11. Record supply usage for the period. - ANSWER Debit supplies expense, credit supplies. 12. Record depreciation for the period. - ANSWER Debit depreciation expense, credit accumulated depreciation. 13. Record interest revenue earned for the period but not collected (received) - ANSWER Debit interest receivable, credit interest revenue. 14. Journalize the annual adjusting entry to be made after it was noted that the Company forgot to record a $600 service revenue on account. - ANSWER Debit accounts receivable, credit service revenue. 15. Journalize the annual adjusting entry to be made after it was noted that the 2020 depreciation for the equipment is $350. - ANSWER Debit depreciation expense, credit accumulated depreciation - equipment. 16. Journalize the annual adjusting entry to be made after it was noted that Company owes $600 for payroll on January 10, 2021, for the payroll period ending December 31, 2020. - ANSWER Debit salaries and wages expense, credit salaries and wages payable. 17. Journalize the annual adjusting entry to be made after it was noted that $1,200 of insurance expired during the year. - ANSWER Debit insurance expense, credit prepaid insurance. 18. Calculate and journalize the annual adjusting entry to be made after it was noted that 10% of the accounts receivable before any adjustments will be uncollectible. - ANSWER Debit bad debt expense, credit allowance for doubtful accounts. 19. Calculate and journalize the annual adjusting entry to be made after it was noted that Company purchased a six-month storage unit on September 1, 2020, for $2,400. (The original entry was posted to the balance sheet account). - ANSWER Debit rent expense, credit prepaid rent. 20. Calculate and journalize the annual adjusting entry to be made to record supplies on hand at year-end of $3,500. - ANSWER Debit supplies expense, credit supplies. 21. The note payable is a 90-day note given to the bank on November 1,2020 bearing interest at 10%. (Use 360 days for the denominator). Calculate and journalize the annual adjusting entry to be made to record interest at year end. Round to the nearest whole dollar. - ANSWER Debit interested expense, credit interest payable. 22. Balance sheet assets are: - ANSWER Current or noncurrent (long term investments, property, plant and equipment, and intangible assets). 23. Balance sheet liabilities are: - ANSWER Current or noncurrent. 24. Balance sheet equity are: - ANSWER Capital stock, additional paid-in capital, and retained earnings. 25. Current assets are presented in the balance sheet as: - ANSWER In order of their liquidity - cash and cash equivalents, short-term investments, receivables, inventories, and prepaid expenses. 26. Long-term investments - ANSWER Investments in securities like common stock, bonds or long-term notes; tangible fixed assets not currently used in operations; set aside in special funds (sinking, pension, plant expansion) & cash surrender value of life insurance; nonconsolidated subsidiaries or affiliated companies. 27. Long-term investments are show in the balance sheet - - ANSWER Below current assets in a separate section called investments. 28. Property, plant and equipment - ANSWER Tangible in nature used in the regular operations (land, land improvements, buildings, machinery, furniture, tools and natural resources). Except for land all are depreciable or depletable. 29. Intangible assets - ANSWER Lack physical substance, benefit lies in the right they convey (patents, copyrights, franchises, goodwill, trademarks, and trade names), 30. Current liabilities - ANSWER Obligations that are reasonably expected to be liquidated either through use of current assets or creation of other current liabilities (notes and accounts payable, advances received from customers referred to as unearned revenue, current maturities of long-term debt, taxes payable, and accrued liabilities). 31. Accounts Receivable - ANSWER Oral promises of the purchaser to pay for goods and services sold. 32. Accounts Receivable Turnover - ANSWER The ratio computed by dividing net sales by average (net) accounts receivable outstanding during the year that measures the number of times, on average, a company collects receivables during the period. 33. Aging Schedule - ANSWER The analysis of customer balances by the length of time they have been unpaid. 34. A start-up company using the moving-average method has the following profile for a month: no beginning inventory purchases of 10,000 units at $1 per unit in the first week purchases of 15,000 units at $1.50 per unit in the third week purchase of 12,000 units at $1.40 per unit and sales of 13,000 units on the last day of the month What is this month's ending balance in the inventory account, rounded to the nearest hundred? $24,000 $31,900 $33,600 $36,000 - ANSWER $31,900 35. A company is analyzing its inventory and wants to apply the lower-of-cost or-market rule to the value of its inventory given below: Inventory sales value $ 120,000 Cost to complete for sale $ 15,000 Inventory costs $ 84,000 Replacement costs $ 82,000 Normal profit margin30% Which inventory value should this company report for the period? $73,500 $82,000 $84,000 $105,000 - ANSWER $82,000 36. A company had an average inventory balance during a year of $53,000. During the year, the company sold inventory to customers at a price of $770,000. The total cost of the inventory sold was $700,000. What was the company's average days to sell inventory for the year, rounded to two decimal places? 13.21 14.53 25.12 27.64 - ANSWER 27.64 37. Simple Interest Equation - ANSWER Interest = P x I x N Where P = principal I = rate of interest for a single period n = number of periods 38. Notes - ANSWER Valuing noncurrent receivables and payables that carry no stated interest rate or a lower than market interest rate 39. Leases - ANSWER Valuing assets and obligations to be capitalized under long-term leases and measuring the amount of the lease payments and annual leasehold amortization. 40. Pensions and Other Postretirement Benefits - ANSWER Measuring service cost components of employers' postretirement benefits expense and postretirement benefits obligation. 41. long term assets - ANSWER Evaluating alternative long-term investments by discounting future cash flows. Determining the value of assets acquired under deferred payment contracts. Measuring impairments of assets. 42. stock-based compensation - ANSWER Determining the fair value of employee services in compensatory stock-option plans. 43. Business Combinations - ANSWER Determining the value of receivables, payables, liabilities, accruals, and commitments acquired or assumed in a "purchase." 44. Discolures - ANSWER Measuring the value of future cash flows from oil and gas reserves for disclosure in supplementary information 45. Environmental Liabilities - ANSWER Determining the fair value of future obligations for asset retirements. 46. Simple Interest - ANSWER Is computed on the amount of the principal only 47. Compound Interest - ANSWER Is computed on the amount of the principal and any interest earned that had not been paid or withdrawn 48. Future Value of 1 - ANSWER Contains the amounts to which 1 will accumulate if deposited now at a specified rate and left for a specified number of periods. Calculated by FVFn,i = (1+i)^n 49. To convert the annual interest rate to correspond to the length of the period - ANSWER To convert the "annual interest rate" into the "compounding period interest rate," a company divides the annual rate by the number of compounding periods per year In addition, companies determine the number of periods by multiplying the number of years involved by the number of compounding periods per year 50. The effective rate - ANSWER Effective rate=(1+i)n−1 51. The present value - ANSWER The present value is the amount needed to invest now, to produce a known future value The present value is always a smaller amount than the known future value, due to earned and accumulated interest 52. The following formula is used to determine the present value of 1 (present value factor): - ANSWER PVFn,i=1/(1+i)n 53. The present value of any single sum (future value), then, is as follows. - ANSWER PV=FV(PVFn,i) 54. Allowance Method - ANSWER A method for recording uncollectible receivables where an estimate is made of the expected uncollectible receivables. 55. Average Days to Sell Inventory - ANSWER The average number of days' sales for which a company has inventory on hand. 56. Average-cost Method - ANSWER An inventory costing method that assumes that the goods available for sale are homogeneous. 57. Bank Overdrafts - ANSWER When a check is written for more than the amount in the cash account. 58. Cash - ANSWER Resources that consist of coin, currency, money orders, certified checks, cashier's checks, personal checks, and bank drafts. 59. Cash Discounts (Sales Discounts) - ANSWER Discounts offered as an inducement for prompt payment communicated in terms that read, for example, 2/10, n/30. 60. Cash Equivalents - ANSWER Short-term, highly liquid temporary investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in interest rates. 61. Compensating Balances - ANSWER Minimum cash balances required by a bank in support of bank loans. 62. Compound Interest - ANSWER Interest accrues on the unpaid interest of past periods as well as on the principal. 63. Consigned Goods - ANSWER Goods shipped by a consignor who retains ownership to another party called the consignee. 64. Cost of Goods Sold - ANSWER The difference between the cost of goods available for sale during the period and the cost of goods on hand at the end of the period. 65. Designated Market Value - ANSWER The amount that a company compares to cost. 66. Direct Write-off Method - ANSWER A method for recording uncollectible receivables where no entry is made until a specific account has been established as uncollectible. 67. F.o.b Destination - ANSWER The terms for shipping goods which state that title does not pass until the buyer receives the goods from the common carrier. 68. F.o.b Shipping Point - ANSWER The terms for shipping goods which state that title passes to the buyer when the seller delivers the goods to the common carrier who acts as an agent for the buyer 69. Finished Goods Inventory - ANSWER The costs identified with the completed but unsold units on hand at the end of the fiscal period. 70. First-in, First-out (FIFO) Method - ANSWER An inventory costing method that assumes that the costs of the earliest goods acquired are the first to be recognized as cost of goods sold. 71. Imputed Interest Rate - ANSWER An approximate, applicable interest rate that may differ from the stated interest rate. 72. Interest - ANSWER Payment for the use of money. 73. Inventories - ANSWER Asset items that a company holds for sale in the ordinary course of business, or goods that it will use or consume in the production of goods to be sold. 74. Inventory Turnover - ANSWER The number of times on average a company sells the inventory during the period. 75. Last-in, First-out (LIFO) Method - ANSWER An inventory costing method that assumes that the costs of the latest units purchased are the first to be allocated to cost of goods sold. 76. Loss Method - ANSWER An accounting method that debits a loss account for the write-down of the inventory to NRV. 77. Lower Limit (Floor) - ANSWER In applying the lower-of-cost-of-market method, the market cannot be valued less than net realizable value less a normal profit margin. 78. Lower-of-cost-or-market (LCM) - ANSWER A basis whereby inventory is stated at the lower of cost or market (current replacement cost). 79. Lower-of-cost-or-net Realizable Value (LCNRV) - ANSWER NRV is the net amount that a company expects to realize from the sale of inventory. Specifically, it is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. 80. Modified Perpetual Inventory System - ANSWER A memorandum device outside the double-entry system provides detailed inventory records of increases and decreases in quantities only—not dollar amounts. 81. Moving-average Method - ANSWER An inventory costing method that uses the average cost method for perpetual inventory records.