, D104 OA2 Intermediate Accounting II
(Units 4–6) – 2026 Actual Questions and
Answers (WGU) (Updated PDF)
1. A company purchases equipment for $100,000. The equipment has an estimated salvage
value of $10,000 and a useful life of 5 years. Using straight-line depreciation, what is annual
depreciation?
A. $18,000
B. $20,000
C. $22,000
D. $90,000
Correct Answer: A. $18,000
Rationale:
Cost − Salvage Value
Depreciation =
Useful Life
100,000 − 10,000
= = $18,000
5
2. Which depreciation method generally produces the highest depreciation expense during
the early years of an asset's life?
A. Straight-line
B. Units-of-production
C. Sum-of-the-years'-digits
D. Activity method
Correct Answer: C. Sum-of-the-years'-digits
Rationale: SYD is an accelerated depreciation method. It allocates a larger portion of
depreciable cost to earlier years.
3. A machine costs $60,000, has a salvage value of $5,000, and a useful life of 5 years. What is
the depreciation expense in Year 1 under SYD?
,A. $11,000
B. $18,333
C. $22,000
D. $55,000
Correct Answer: C. $18,333
Rationale:
Sum of years:
5 + 4 + 3 + 2 + 1 = 15
Year 1 fraction:
5/15
Depreciable cost:
60,000 − 5,000 = 55,000
55,000 × 5/15 = $18,333
4. Using the information in Question 3, what would Year 5 depreciation be under SYD?
A. $3,667
B. $11,000
C. $18,333
D. $22,000
Correct Answer: A. $3,667
Rationale:
55,000 × 1/15 = $3,666.67
Rounded:
$3,667
5. Which statement about SYD depreciation is correct?
, A. Depreciation increases every year.
B. Depreciation remains constant.
C. Depreciation is higher in earlier years and lower in later years.
D. Salvage value is ignored.
Correct Answer: C. Depreciation is higher in earlier years and lower in later years.
Rationale: SYD is an accelerated method, so depreciation expense declines as the asset ages.
6. A machine costs $200,000 and has a 10-year useful life with no salvage value. Under
double-declining balance, what is the initial depreciation rate?
A. 5%
B. 10%
C. 20%
D. 25%
Correct Answer: C. 20%
Rationale:
Straight-line rate:
1/10 = 10%
Double-declining rate:
10% × 2 = 20%
7. Which depreciation method bases depreciation on actual usage rather than simply the
passage of time?
A. Straight-line
B. SYD
C. Units-of-production
D. Double-declining balance
Correct Answer: C. Units-of-production
Rationale: The activity/units-of-production method relates depreciation to actual activity or
usage.
(Units 4–6) – 2026 Actual Questions and
Answers (WGU) (Updated PDF)
1. A company purchases equipment for $100,000. The equipment has an estimated salvage
value of $10,000 and a useful life of 5 years. Using straight-line depreciation, what is annual
depreciation?
A. $18,000
B. $20,000
C. $22,000
D. $90,000
Correct Answer: A. $18,000
Rationale:
Cost − Salvage Value
Depreciation =
Useful Life
100,000 − 10,000
= = $18,000
5
2. Which depreciation method generally produces the highest depreciation expense during
the early years of an asset's life?
A. Straight-line
B. Units-of-production
C. Sum-of-the-years'-digits
D. Activity method
Correct Answer: C. Sum-of-the-years'-digits
Rationale: SYD is an accelerated depreciation method. It allocates a larger portion of
depreciable cost to earlier years.
3. A machine costs $60,000, has a salvage value of $5,000, and a useful life of 5 years. What is
the depreciation expense in Year 1 under SYD?
,A. $11,000
B. $18,333
C. $22,000
D. $55,000
Correct Answer: C. $18,333
Rationale:
Sum of years:
5 + 4 + 3 + 2 + 1 = 15
Year 1 fraction:
5/15
Depreciable cost:
60,000 − 5,000 = 55,000
55,000 × 5/15 = $18,333
4. Using the information in Question 3, what would Year 5 depreciation be under SYD?
A. $3,667
B. $11,000
C. $18,333
D. $22,000
Correct Answer: A. $3,667
Rationale:
55,000 × 1/15 = $3,666.67
Rounded:
$3,667
5. Which statement about SYD depreciation is correct?
, A. Depreciation increases every year.
B. Depreciation remains constant.
C. Depreciation is higher in earlier years and lower in later years.
D. Salvage value is ignored.
Correct Answer: C. Depreciation is higher in earlier years and lower in later years.
Rationale: SYD is an accelerated method, so depreciation expense declines as the asset ages.
6. A machine costs $200,000 and has a 10-year useful life with no salvage value. Under
double-declining balance, what is the initial depreciation rate?
A. 5%
B. 10%
C. 20%
D. 25%
Correct Answer: C. 20%
Rationale:
Straight-line rate:
1/10 = 10%
Double-declining rate:
10% × 2 = 20%
7. Which depreciation method bases depreciation on actual usage rather than simply the
passage of time?
A. Straight-line
B. SYD
C. Units-of-production
D. Double-declining balance
Correct Answer: C. Units-of-production
Rationale: The activity/units-of-production method relates depreciation to actual activity or
usage.
