WGU D102 Financial Accounting Mock Final Exam verified with correct answers
with rationales 2026/2027 version
1. Which financial statement reports revenues and expenses over a period of time?
• A. Balance Sheet
• B. Income Statement
• C. Statement of Cash Flows
• D. Statement of Retained Earnings
Answer: B
Rationale: The income statement measures profitability over a reporting period.
2. Which of the following is an asset?
• A. Accounts Payable
• B. Common Stock
• C. Cash
• D. Service Revenue
Answer: C
Rationale: Cash is a current asset.
3. Which account normally has a credit balance?
• A. Cash
• B. Equipment
• C. Accounts Payable
• D. Supplies
Answer: C
Rationale: Liabilities normally carry credit balances.
4. The accounting equation is:
• A. Assets = Liabilities − Equity
• B. Assets = Liabilities + Owner's Equity
, • C. Assets + Expenses = Revenue
• D. Revenue = Assets − Expenses
Answer: B
Rationale: This is the fundamental accounting equation.
5. A company purchases office supplies for cash. Which accounts are affected?
• A. Increase Supplies; Decrease Cash
• B. Increase Supplies Expense; Increase Cash
• C. Increase Revenue; Decrease Cash
• D. Increase Accounts Payable; Decrease Cash
Answer: A
Rationale: Supplies (asset) increase while Cash (asset) decreases.
6. Which accounting principle requires expenses to be recorded in the same period as the related
revenues?
• A. Cost Principle
• B. Matching Principle
• C. Revenue Recognition Principle
• D. Consistency Principle
Answer: B
Rationale: The matching principle aligns expenses with the revenues they help generate.
7. Which account is classified as a current liability?
• A. Equipment
• B. Notes Payable due in 5 years
• C. Accounts Payable
• D. Land
Answer: C
Rationale: Accounts payable are generally due within one year.
, 8. Which financial statement is prepared last?
• A. Income Statement
• B. Statement of Retained Earnings
• C. Balance Sheet
• D. Trial Balance
Answer: C
Rationale: The balance sheet is prepared after retained earnings has been updated.
9. Unearned Revenue is recorded when:
• A. Cash is received before services are provided.
• B. Services are completed but not billed.
• C. Cash is paid for future expenses.
• D. Inventory is purchased.
Answer: A
Rationale: Unearned revenue is a liability until services are performed.
10. Which journal entry records the payment of rent?
• A. Debit Rent Expense; Credit Cash
• B. Debit Cash; Credit Rent Expense
• C. Debit Rent Expense; Credit Accounts Payable
• D. Debit Prepaid Rent; Credit Revenue
Answer: A
Rationale: Paying rent increases expense and decreases cash.
11. Which of the following is a revenue account?
• A. Salaries Expense
• B. Service Revenue
• C. Accounts Receivable
with rationales 2026/2027 version
1. Which financial statement reports revenues and expenses over a period of time?
• A. Balance Sheet
• B. Income Statement
• C. Statement of Cash Flows
• D. Statement of Retained Earnings
Answer: B
Rationale: The income statement measures profitability over a reporting period.
2. Which of the following is an asset?
• A. Accounts Payable
• B. Common Stock
• C. Cash
• D. Service Revenue
Answer: C
Rationale: Cash is a current asset.
3. Which account normally has a credit balance?
• A. Cash
• B. Equipment
• C. Accounts Payable
• D. Supplies
Answer: C
Rationale: Liabilities normally carry credit balances.
4. The accounting equation is:
• A. Assets = Liabilities − Equity
• B. Assets = Liabilities + Owner's Equity
, • C. Assets + Expenses = Revenue
• D. Revenue = Assets − Expenses
Answer: B
Rationale: This is the fundamental accounting equation.
5. A company purchases office supplies for cash. Which accounts are affected?
• A. Increase Supplies; Decrease Cash
• B. Increase Supplies Expense; Increase Cash
• C. Increase Revenue; Decrease Cash
• D. Increase Accounts Payable; Decrease Cash
Answer: A
Rationale: Supplies (asset) increase while Cash (asset) decreases.
6. Which accounting principle requires expenses to be recorded in the same period as the related
revenues?
• A. Cost Principle
• B. Matching Principle
• C. Revenue Recognition Principle
• D. Consistency Principle
Answer: B
Rationale: The matching principle aligns expenses with the revenues they help generate.
7. Which account is classified as a current liability?
• A. Equipment
• B. Notes Payable due in 5 years
• C. Accounts Payable
• D. Land
Answer: C
Rationale: Accounts payable are generally due within one year.
, 8. Which financial statement is prepared last?
• A. Income Statement
• B. Statement of Retained Earnings
• C. Balance Sheet
• D. Trial Balance
Answer: C
Rationale: The balance sheet is prepared after retained earnings has been updated.
9. Unearned Revenue is recorded when:
• A. Cash is received before services are provided.
• B. Services are completed but not billed.
• C. Cash is paid for future expenses.
• D. Inventory is purchased.
Answer: A
Rationale: Unearned revenue is a liability until services are performed.
10. Which journal entry records the payment of rent?
• A. Debit Rent Expense; Credit Cash
• B. Debit Cash; Credit Rent Expense
• C. Debit Rent Expense; Credit Accounts Payable
• D. Debit Prepaid Rent; Credit Revenue
Answer: A
Rationale: Paying rent increases expense and decreases cash.
11. Which of the following is a revenue account?
• A. Salaries Expense
• B. Service Revenue
• C. Accounts Receivable
