WGU D102 Financial Accounting Exam
Questions and Answers 2026 Update
On January 1, a company had these assets, liabilities, and equity:
Cash$100, Inventory $140, Accounts Payable $70,
Paid-In Capital $150, Retained Earnings $20
During the year, the company entered into the following transactions:
Sold inventory costing $140 for a total of $200; cash of $30 was received, and the
remaining $170 was put on account.
Paid cash for rent of $45. Paid cash dividends of $10.
What is the total of this company's total equity at the end of the year?
150+20-140+200-45-10=$175
On January 1, the company had office supplies costing $4,600. During the year,
the company bought (and recorded) additional office supplies costing $8,200. On
December 31, a physical count of office supplies revealed that supplies costing
$2,900 remained. Which debit or credit is correctly included in the adjusting
journal entry necessary on December 31 to record the supplies that this company
used during the year?
Credit to Office Supplies for $9,900
Debit: Office Supplies Exp $9900
Credit: Office Supplies $9000
,On September 1 of Year 1, a company paid $2,400 cash for insurance. This $2,400
insurance payment covers the period from September 1 of Year 1 to August 31 of
Year 2. On September 1, the payment of the cash was recorded as an asset,
Prepaid Insurance. Which debit or credit is correctly included in the adjusting
journal entry necessary on December 31 with respect to this Prepaid Insurance?
Debit to Insurance Expense for $800
Debit: Insurance Expense $800
Credit: Prepaid Insurance $800
On January 1 of Year 1, a company purchased a machine for $30,000. The machine
is expected to have an eight-year useful life and salvage value of $6,000. Assuming
that the company uses double-declining balance depreciation, what is the amount
of depreciation expense on this machine for Year 2?
1/8=.13x2=.25x30,000=7500;
30,000-7,500=22,500
22,500x.25=$5,625
,On September 1 of Year 1, a company paid $6,000 for two years' rent and
recorded the entire amount as a debit to prepaid rent. Which debit or credit is
correctly included in the adjusting journal entry necessary on December 31 of
Year 1?
Debit to Rent Expense of $1,000
(250x24= 6000)(250x4= 1000)
Debit: Prepay rent $6000
Credit: Cash $6000
Debit: Rent Expense $1000
Credit: Prepaid Rent $1000
The Freedom Rock Corporation has total assets of $94,000 and total liabilities of
$37,500. What is the amount of its owners' equity?
94,00-37,500=$56,500
, What is a liability?
Obligation to pay cash, transfer other assets, or provide services to someone else
Accounts that are liabilities?
Accounts Payable and Loans Payable
What is expense?
The amount of assets consumed through business operations
What should be used to compute net income?
Sales, Cost of Goods Sold, and Income Tax Expense
What is used to compute earnings per share (EPS)?
Net Income / Number of Shares Outstanding
What is included in the computation of total cash from financing activities?
Cash paid for dividends, cash received from new loans, and cash received as a new
investment from owners
Questions and Answers 2026 Update
On January 1, a company had these assets, liabilities, and equity:
Cash$100, Inventory $140, Accounts Payable $70,
Paid-In Capital $150, Retained Earnings $20
During the year, the company entered into the following transactions:
Sold inventory costing $140 for a total of $200; cash of $30 was received, and the
remaining $170 was put on account.
Paid cash for rent of $45. Paid cash dividends of $10.
What is the total of this company's total equity at the end of the year?
150+20-140+200-45-10=$175
On January 1, the company had office supplies costing $4,600. During the year,
the company bought (and recorded) additional office supplies costing $8,200. On
December 31, a physical count of office supplies revealed that supplies costing
$2,900 remained. Which debit or credit is correctly included in the adjusting
journal entry necessary on December 31 to record the supplies that this company
used during the year?
Credit to Office Supplies for $9,900
Debit: Office Supplies Exp $9900
Credit: Office Supplies $9000
,On September 1 of Year 1, a company paid $2,400 cash for insurance. This $2,400
insurance payment covers the period from September 1 of Year 1 to August 31 of
Year 2. On September 1, the payment of the cash was recorded as an asset,
Prepaid Insurance. Which debit or credit is correctly included in the adjusting
journal entry necessary on December 31 with respect to this Prepaid Insurance?
Debit to Insurance Expense for $800
Debit: Insurance Expense $800
Credit: Prepaid Insurance $800
On January 1 of Year 1, a company purchased a machine for $30,000. The machine
is expected to have an eight-year useful life and salvage value of $6,000. Assuming
that the company uses double-declining balance depreciation, what is the amount
of depreciation expense on this machine for Year 2?
1/8=.13x2=.25x30,000=7500;
30,000-7,500=22,500
22,500x.25=$5,625
,On September 1 of Year 1, a company paid $6,000 for two years' rent and
recorded the entire amount as a debit to prepaid rent. Which debit or credit is
correctly included in the adjusting journal entry necessary on December 31 of
Year 1?
Debit to Rent Expense of $1,000
(250x24= 6000)(250x4= 1000)
Debit: Prepay rent $6000
Credit: Cash $6000
Debit: Rent Expense $1000
Credit: Prepaid Rent $1000
The Freedom Rock Corporation has total assets of $94,000 and total liabilities of
$37,500. What is the amount of its owners' equity?
94,00-37,500=$56,500
, What is a liability?
Obligation to pay cash, transfer other assets, or provide services to someone else
Accounts that are liabilities?
Accounts Payable and Loans Payable
What is expense?
The amount of assets consumed through business operations
What should be used to compute net income?
Sales, Cost of Goods Sold, and Income Tax Expense
What is used to compute earnings per share (EPS)?
Net Income / Number of Shares Outstanding
What is included in the computation of total cash from financing activities?
Cash paid for dividends, cash received from new loans, and cash received as a new
investment from owners
