WGU D555: Advanced Financial Accounting II

What D555 Is and Where It Sits in Your Degree

D555: Advanced Financial Accounting II is a graduate course in Western Governors University's Master of Science in Accounting, worth 3 competency units. It is the back half of a pair: WGU's own program guide describes it as building on D554: Advanced Financial Accounting I, and the standard path for the Financial Reporting specialization schedules both courses in the same term. If D554 kept you inside the consolidated group — eliminations, allocations, changes in ownership interest — D555 pushes outward into the reporting problems that surface when a company transacts in other currencies, files with regulators, reports mid-year, or is organized as a partnership rather than a corporation.

Direct answer: Prepare for D555 by working the numbers, not by reading about them. Rebuild every worked example in your course materials by hand — foreign currency journal entries, translation worksheets, partnership liquidation schedules — until you can produce each one from a blank page, then use the pre-assessment to find the two or three areas you still fumble and drill only those before you schedule the proctored exam.

WGU's published description is short and covers a lot of ground: foreign currency transactions, hedging, annual and interim reporting, and partnership accounting, with the promise that you will finish able to keep partnership records, translate a foreign subsidiary's statements, and explain what the Securities and Exchange Commission requires. That spread is what makes the course feel heavier than its 3 CUs suggest. You are not deepening one framework; you are learning three or four separate ones and being asked to switch between them without warning.

It matters beyond the transcript: these topics separate someone who can close a set of books from someone who can report for a multinational or a professional partnership, and much of the material resurfaces in CPA exam preparation. Treat D555 as groundwork and the hours pay twice.

Topics the Objective Assessment Draws From

D555 is assessed by a proctored objective assessment: a computer-delivered exam with no task or paper to submit, so a single sitting carries your whole result. Confirm the format on your own course page before planning around it. WGU's program guide lists three graded competencies for D555, and in practice they break into four things you have to be able to do:

• Foreign currency transactions and hedging. Recording a transaction denominated in a foreign currency at initiation, adjusting it at the balance sheet date, and settling it, with the exchange differences landing in the right place. Then forward contracts and options used as fair value hedges, cash flow hedges, hedges of a firm commitment or a forecasted transaction, and hedges of a net investment in a foreign operation.
• Translating foreign currency financial statements. Determining a subsidiary's functional currency first, then applying the method that follows from it: the current rate method, with the resulting translation adjustment parked in other comprehensive income, versus remeasurement using historical rates for nonmonetary items, with the gain or loss running through income.
• SEC, segment, and interim reporting. What the SEC requires and why, the purpose of the major periodic filings, how operating segments are identified under the management approach and which cross the reporting thresholds, and how interim periods are handled — including the estimated annual effective tax rate.
• Partnership accounting. Formation and capital contributions, allocating profit and loss when the agreement mixes salary allowances, interest on capital balances, and residual ratios, admitting or retiring a partner under the bonus and goodwill approaches, and liquidation — lump-sum and installment, with capital deficiencies and safe-payment schedules.

The first two clusters sit inside one official competency — WGU pairs hedging with translation — but they behave differently enough on paper to study separately. Across all four, expect application over recall: questions are typically short scenarios where you must decide which method applies before you can compute anything, so the decision rule matters as much as the arithmetic.

How Hard It Really Is, and How Long to Budget

D555 has a reputation as one of the more demanding courses in the master's program, and the reason is structural rather than conceptual: the topics do not reinforce each other. Partnership liquidation has nothing to do with hedge accounting, so there is no momentum carrying you from one unit into the next. The currency material is where careless work costs the most — knowing that a gain exists is easy, and knowing whether it belongs in income or in other comprehensive income is where points quietly disappear.

Plan on roughly three to five weeks if you are studying alongside full-time work — an hour or two on weekdays with longer weekend blocks. Coming straight out of D554 while consolidation mechanics are still fresh will move you faster, and so will practical exposure to multi-currency reporting. If your last serious accounting course was D102: Financial Accounting several terms ago, add time and rebuild your journal entry fluency first. Treat any timeline you read online, this one included, as a planning estimate rather than a measured average — pace here is a byproduct of practice volume, not of clever shortcuts.

A Study Approach Built for This Material

Reading is the least efficient way to prepare for D555. Structure your weeks around producing output instead.

1. Take the pre-assessment before you feel ready. An early score is diagnostic, not a verdict. It tells you which of the four clusters is weakest so you can weight your time deliberately instead of studying everything evenly.
2. Rebuild worked examples from blank paper. Read a solved example once, close it, and reproduce it. Then compare line by line. For procedural accounting, that retrieval practice beats highlighting by a wide margin.
3. Keep a one-page decision sheet per topic. One page for functional currency and the translation method that follows. One for the hedge types and where each gain or loss goes. One for partnership admission — bonus versus goodwill, and who absorbs what. Rewriting them from memory each week is your spaced repetition.
4. Build the schedules in a spreadsheet, then by hand. A spreadsheet forces you to articulate the structure of a liquidation schedule or a translation worksheet; doing it by hand afterward proves you were not leaning on formulas you could not rebuild in the exam.
5. Narrate your reasoning out loud. Say why a rate is historical rather than current before you use it. If you cannot finish the sentence, you have found a gap.
6. Space your practice testing. Retake sections of practice material several days apart rather than in one block. The forgetting between sessions is what makes the second pass stick.
7. Use your course instructor. They are assigned to you and see where students in this course lose points; one conversation about hedge classification can save a week of confusion. If D250: Governmental and Nonprofit Accounting is also on your plan, ask how students usually sequence the two.

Where Students Lose Points in D555

• Confusing translation with remeasurement. They are different methods with different destinations for the resulting adjustment. Pick the method from the functional currency first, every time, before touching a number.
• Memorizing hedge journal entries without the classification logic. The entry follows from the hedge type. Learn the taxonomy and the entries become predictable.
• Skipping partnership liquidation because it looks like bookkeeping. Installment liquidations with a deficient partner are among the most procedurally demanding items in the course, and also the easiest to practice — cheap points you should not concede.
• Treating SEC and interim reporting as light reading. These sections are conceptual, so they get skimmed, and then the questions turn out to be precise about filing purposes, segment thresholds, and interim tax treatment.
• Relying on circulated answer sets instead of the course materials. Shared files are often wrong, usually out of date, and using them puts you on the wrong side of academic integrity policy. The competencies are published; study those.
• Scheduling the exam around the term deadline rather than around readiness. Book it once your practice results are consistently strong, leaving buffer in the term for a retake.

D555 Readiness Checklist

• Can you determine a subsidiary's functional currency from a scenario and justify the translation method that follows?
• Can you record a foreign currency payable at transaction date, balance sheet date, and settlement, placing each exchange difference correctly?
• Can you name the main hedge classifications and state, for each, whether the change in value affects income or other comprehensive income?
• Can you build a translation worksheet and explain why each line uses a current, average, or historical rate?
• Can you allocate partnership income when the agreement combines salary allowances, interest on capital, and a residual ratio?
• Can you handle the admission of a new partner under both the bonus and the goodwill approach, and explain when each applies?
• Can you produce an installment liquidation schedule that correctly absorbs a capital deficiency?
• Can you explain the purpose of the SEC's periodic filings and how an operating segment becomes reportable?
• Can you explain how income taxes are estimated for an interim period?

D555 FAQ

Is D555 an objective assessment or a performance assessment?

D555 is assessed by a proctored objective assessment, with no submitted task, so timed practice matters more here than in project-based courses. WGU's program guide does not label assessment type course by course, so confirm the format on your course page once you are enrolled.

How many competency units is D555 worth?

Three competency units, per WGU's published program guide for the Master of Science in Accounting. On the Financial Reporting specialization's standard path it sits in the same term as D554, which is also worth 3 CUs.

Do I need to finish D554 before starting D555?

WGU describes D555 as building on D554, and the standard path sequences them together rather than making one a hard prerequisite. Taking them in order is still easier, because consolidation mechanics stay fresh for the foreign subsidiary material.

What is the most efficient thing to study first?

Foreign currency and translation, because it is the widest cluster and the one most people find slipperiest. Partnership accounting rewards practice and can be improved quickly later on, while SEC, segment, and interim reporting are best reviewed close to your exam date.

How long does D555 take to finish?

There is no published average; it depends on your background. Three to five weeks of steady study alongside work is a reasonable plan, and students coming directly from D554, or already working in multi-currency reporting, often need less.

Where can I confirm the official course details?

Check WGU's own program materials — the course description, competencies, and CU count come from the published program guide and the Master of Accounting program pages. This site is an independent study resource and is not affiliated with WGU. For more business-school guides, see our School of Business hub or browse all WGU course guides.