D555 Advanced Financial Accounting II continues the advanced accounting sequence in WGU's Master of Science in Accounting. WGU says it gives a deeper understanding of foreign currency transactions, hedging, annual and interim reporting and partnership accounting.
The course feels different from Part I because it mixes calculation topics with reporting rules. Students must move between translating statements, recording partnership entries and explaining SEC disclosure requirements.
Course at a Glance
| Item | Details |
|---|---|
| University | Western Governors University (WGU) |
| Course | D555 Advanced Financial Accounting II |
| Level | Graduate (MS Accounting, Financial Reporting and Taxation tracks) |
| Competency units | 3, term 3 of the standard path |
| Builds on | Advanced Financial Accounting I |
| Typical work | Calculation problems and explanatory writing on reporting rules |
What D555 Covers
| Competency (summarized) | In practice |
|---|---|
| Account for hedging of foreign currency transactions and translate foreign currency statements | Recording hedges and converting a foreign subsidiary's statements |
| Explain SEC, segment and interim reporting requirements | What must be disclosed, when and why |
| Prepare essential records for partnerships, including formation, operations and liquidations | Capital accounts, profit sharing and winding up |
Key Concepts Explained
Foreign Currency Transactions
A sale or purchase in a foreign currency is recorded at the exchange rate on the transaction date. If the rate moves before settlement, the difference is an exchange gain or loss.
Example: A US company buys goods for 10,000 euros when 1 euro is $1.10, recording $11,000 payable. At payment the rate is $1.15, so it pays $11,500, an exchange loss of $500.
Partnership Liquidation
On liquidation, assets are sold, creditors are paid, and any remaining cash goes to partners according to their capital balances after gains and losses are shared.
Example: Partners A and B share profits equally. Assets with a book value of $100,000 sell for $80,000, so the $20,000 loss is split $10,000 each and reduces each capital account before cash is distributed.
Segment and Interim Reporting
Segment disclosures help investors see how different parts of the business perform. Interim reports cover periods shorter than a year and follow specific recognition rules.
Typical Assignments and How to Approach Them
| Task | What it tests | How to approach it |
|---|---|---|
| Translation and hedge problems | Correct rates and gain or loss treatment | List which rate applies to which item before calculating |
| Partnership entries | Formation, income sharing, liquidation | Track each partner's capital account in a schedule |
| Reporting explanation | SEC, segment and interim requirements | State the rule, then show why it applies |
Planning Your Time Across Three Topics
Because the three competencies are quite different, split your study time rather than finishing one completely. Foreign currency and hedging usually need the most practice problems. Partnership accounting is more mechanical and rewards a clean schedule.
Reporting requirements are best learned by purpose: ask who reads each disclosure and what decision it supports. That turns a list of rules into something you can explain in your own words, which is what written questions tend to reward.
Where D555 Sits in the Program
WGU's standard path places Advanced Financial Accounting II in term 3 with Part I, in both the Financial Reporting and Taxation specializations. Part I deals with combining a parent and subsidiary.
Part II widens the lens to international operations and external reporting, so currency and disclosure questions often assume you can already read a consolidated statement.
Worked Pattern for Translation Questions
A reliable pattern is to state the functional currency, list each statement item with the rate that applies, translate, and then identify the balancing adjustment. Presenting those four steps in order makes it easy for a reviewer to follow, and shows you understand why the adjustment exists.
Example: A foreign subsidiary reports equipment of 200,000 foreign units. If the rate at the balance sheet date is $0.50 per unit, the translated equipment is $100,000. If revenue was earned evenly through the year, an average rate is normally used for it, which is why the statement may not balance until the translation adjustment is included.
Where Students Get Stuck
- Wrong exchange rate. Current, historical and average rates apply to different items.
- Hedge terminology. Be clear what is being hedged and which gains or losses are offsetting.
- Capital account errors. Always reconcile to total capital after each entry.
- Memorizing disclosure rules without context. Link each one to the user it helps.
Study Tips for D555
- Make a one-page table of which rate applies to which item.
- Do liquidation problems with different loss sizes to see how deficits arise.
- Write a short purpose line for each reporting requirement.
- Revisit Part I consolidation basics before starting.
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Frequently Asked Questions
Foreign currency and hedging, SEC, segment and interim reporting, and partnership formation, operations and liquidation.
WGU describes Part II as building on Part I, so yes, in practice.
The Financial Reporting and Taxation specializations of the MS Accounting.
Yes, but also explanation of reporting requirements, so prepare for both.
No. We tutor and provide study models only.
Look at your WGU course page, since codes can be updated.