Wall Street Prep Accounting Crash Course Exam Version 1

• | P a g e

Wall Street Prep Accounting Crash Course Exam (Version 1 & 2)Includes Accurate And Verified Questions Covering Core Accounting Principles Such As The Accounting Equation, Financial Statements (Income Statement, Balance Sheet, Cash Flow), Journal Entries, Revenue Recognition, Accruals, Depreciation, And Working Capital.

Version 1 On June 30, 2020, a company that sells smartphones prepaid $50,000 to cover the next 12 months' worth of utilities. 6 months later, the company reports their annual results.

Assuming no adjustments have been made since the original journal entries, what journal entries should be made when reporting the annual results?

• No adjustment is required until June 30, 2021.
• Credit prepaid expenses for $25,000 and debit retained earnings

for $25,000.

• Debit prepaid expenses for $25,000 and credit retained earnings

for $25,000.

• Debit prepaid expenses for $25,000 and credit cash for $25,000.
• Credit prepaid expenses for $25,000 and debit retained earnings

for $25,000.

Imagine two identical companies, with only one difference - Company A reports using LIFO, while Company B reports using FIFO. Assume that prices of inventories steadily rise over time.Which of the following is correct?

• Company A will report lower net income than company B
• Company A will report higher PP&E than company B.
• Company A will report higher total assets than company B.
• Company A and Company B will have identical shareholders 1 / 4

• | P a g e

equity balances.

• Company A will report lower net income than company B

Amazonia, an online retailer, lost $50 million in inventory due to a fire. Which of the following journal entries will likely occur as a result?

• $50 million debit to inventory and $50 million credit to retained

earnings

• $50 million debit to inventory and $50 million credit to cash
• $50 million credit to inventory and $50 million debit to retained

earnings

• $50 million credit to inventory and $50 million debit to cash
• $50 million credit to inventory and $50 million debit to retained

earnings

On January 1, 2020, a company purchases equipment with a useful life of 5 years for $50 million. The company uses straight-line depreciation and has assumed no residual value for the company. On January 1, 2023, the company sells the equipment for $45 million.Which of the following is correct?

• When the company sells the equipment, it will recognize a $15

million gain on sale on the income statement.

• When the company sells the equipment, it will recognize a $5

million loss on sale on the income statement.

• When the company sells the equipment, it will recognize a $25

million gain on sale on the income statement.

• When the company sells the equipment, it will recognize a $45

million gain on sale on the income statement.

• When the company sells the equipment, it will recognize a $25

million gain on sale on the income statement.

During 2014, Boston Company's assets increased $95,500 and the 2 / 4

• | P a g e

liabilities decreased $17,300. Boston Company's stockholders' equity at December 31, 2014 was $211,500. What amount was stockholders' equity at January 1, 2014?

$98,700

Consider a single business transaction's impact on the balance sheet.Which of the following could NOT possibly occur as a result of this single transaction?

• An increase in an asset and a decrease in an asset.
• A decrease in stockholders' equity and a decrease in an asset.
• An increase in a liability and a decrease in an asset.
• An increase in stockholders' equity and an increase in an asset.
• An increase in a liability and a decrease in an asset.

A company's June 1, 2014 balance sheet reported total assets of $150,000 and total liabilities of $60,000. During June 2014, the

company completed the following transactions:

• Paid a note payable using $10,000 cash (no interest was paid)
• Collected a $9,000 accounts receivable
• Paid a $5,000 accounts payable
• Purchased a truck for $5,000 cash and by signing a $20,000 note

payable from a bank.The company's June 30, 2014 balance sheet would report which of the following?

• $150,000 assets, $60,000 liabilities, $90,000 Stockholder's Equity
• $155,000 assets, $65,000 liabilities, $90,000 Stockholder's Equity
• $160,000 assets, $75,000 liabilities, $85,000 Stockholder's Equity
• $170,000 assets, $100,000 liabilities, $70,000 Stockholder's

Equity Option B) $155,000 assets, $65,000 liabilities, $90,000 Stockholder's Equity

• / 4

• | P a g e

A company’s June 1, 2014 balance sheet reported total assets of $120,000 and total liabilities of $40,000. During June 2014, the

following transactions occurred:

• The company issued stock and collected cash totaling $30,000.

• The company paid an account payable of $6,000.

• The company purchased supplies for $1,000 with cash.

• The company purchased land for $60,000 by paying $10,000 with

cash and signing a note payable for the balance.

What is total stockholders’ equity after the transactions above?

$110,000

We have an expert-written solution to this problem!Lemon has provided the following information for its recent year of

operation:

• The common stock account balance at the beginning of the year was

$20,000 and the year-end balance was $25,000.

• The additional paid-in capital account balance increased $2,500

during the year.

• The retained earnings balance at the beginning of the year was

$75,000 and the year-end balance was $91,000.

• Net income was $26,000.

How much were Lemon’s dividends during its recent year of operation?

• / 4