D102 covers the core of financial accounting: recording transactions under GAAP and turning them into the statements that investors, lenders and managers rely on.
WGU's B.S. Accounting program guide describes the course as focusing on how accounting principles are used in business operations.
Students learn how the accounting cycle records transactions under generally accepted accounting principles (GAAP), are introduced to assets, liabilities and equity, and study bank reconciliations, balance sheets and business ethics. Principles of Accounting is listed as the prerequisite.
D102 is the foundation for Intermediate Accounting I to III. Students who make debits and credits automatic here find later courses far easier.
Course at a Glance
| Item | Details |
|---|---|
| University | Western Governors University (WGU) |
| Code | D102 |
| Level | Undergraduate, B.S. Accounting |
| Competency units | 3 |
| Prerequisite | Principles of Accounting |
| Typical work | Journal entries, adjustments and statements (check your course page for the assessment format) |
What D102 Covers
| Competency (summarized) | Key topics |
|---|---|
| Describe the basic financial statements and how they relate | Income statement, retained earnings, balance sheet, cash flows |
| Apply the accounting cycle to prepare statements | Journalising, posting, trial balance, adjustments |
| Apply the cycle to close the books | Closing entries and post-closing trial balance |
| Explain internal controls | Segregation of duties, bank reconciliations |
| Account for receivables | Credit sales, allowance for doubtful accounts |
| Account for inventory | FIFO, LIFO, weighted average |
| Account for PP&E and intangibles | Cost, depreciation, amortisation |
| Account for liabilities and equity | Payables, notes, stock and dividends |
Key Concepts Explained
The Accounting Equation and Adjusting Entries
Assets = Liabilities + Equity. Every transaction keeps this in balance. Adjusting entries at period end record revenue earned and expenses incurred that have not yet been entered, following accrual accounting.
Example: On 1 December a company pays $6,000 for six months of insurance, debiting Prepaid Insurance. On 31 December one month has expired, so it debits Insurance Expense $1,000 and credits Prepaid Insurance $1,000. The balance sheet now shows $5,000 of prepaid insurance remaining.
Inventory Methods
FIFO assumes the oldest units are sold first; LIFO assumes the newest; weighted average uses an average cost. When prices rise, FIFO gives higher ending inventory and profit than LIFO.
Example: A shop buys 100 units at $10, then 100 at $12, and sells 150. FIFO cost of goods sold = 100 x $10 + 50 x $12 = $1,600. LIFO = 100 x $12 + 50 x $10 = $1,700. Weighted average = 150 x $11 = $1,650.
Allowance for Doubtful Accounts
Companies estimate uncollectible receivables and record bad debt expense in the same period as the sales, so receivables are reported at the amount expected to be collected.
Depreciation
Straight-line depreciation = (cost - residual value) / useful life. A $50,000 machine with a $5,000 residual value and a 5-year life depreciates $9,000 a year.
Internal Controls and Bank Reconciliations
Internal controls protect assets and keep records reliable. Core principles include segregation of duties (the person who handles cash does not record it), authorization, physical safeguards, documentation and independent checks.
A bank reconciliation is one such check. It explains differences between the bank statement and the company's cash account.
- Adjust the bank balance for deposits in transit and outstanding checks.
- Adjust the book balance for bank fees, interest, NSF checks and errors.
- Record journal entries only for the book-side adjustments.
When both adjusted balances agree, the reconciliation is complete. If they do not, look for transposed digits and items recorded twice.
Typical Tasks and How to Approach Them
| Task type | What it tests | How to approach it |
|---|---|---|
| Journal entries | Debits, credits and accounts | Identify accounts affected and whether each rises or falls |
| Adjusting and closing | Accrual accounting and the cycle | Work through each adjustment type in order |
| Statement preparation | Format and links between statements | Prepare the income statement first, then equity, then the balance sheet |
| Inventory and depreciation | Method calculations | Use a table for each layer or year |
Ethics in Financial Reporting
WGU's description includes business ethics alongside the technical topics. In financial accounting, ethics usually means reporting faithfully even when the result is unwelcome.
Common pressures include recording revenue early to hit a target, delaying expenses into the next period, or understating the allowance for doubtful accounts. Each one breaks the accrual principles you learn in this course.
Strong internal controls make these pressures harder to act on, which is why the two topics sit together. When a question asks about an ethical dilemma, identify the accounting rule at stake, the users who would be misled and the action a professional accountant should take.
Where Students Get Stuck
- Debit and credit rules. Assets and expenses increase with debits; liabilities, equity and revenue with credits.
- Missing adjustments. Check prepaid items, accruals, depreciation and unearned revenue every period.
- Closing entries. Close revenues, expenses and dividends to retained earnings, not to cash.
- Bank reconciliation sides. Only book-side items need journal entries.
Study Tips for D102
- Use T-accounts until debits and credits feel automatic.
- Practice one full accounting cycle from transactions to closing.
- Make a summary table of inventory and depreciation methods.
- Check every balance sheet: assets must equal liabilities plus equity.
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Frequently Asked Questions
The accounting cycle under GAAP, financial statements, closing the books, internal controls, receivables, inventory, long-lived assets, liabilities and equity.
WGU's program guide lists Principles of Accounting.
Intermediate Accounting I (D103), which lists Financial Accounting as its prerequisite.
The competencies cover accounting for inventory; expect to compare common cost flow methods.
WGU uses objective assessments, performance assessments or both. Check your course page for the current format.
Yes, with worked problems, explanations and feedback. We do not take assessments for students.