1
Accounting Crash Course Exam V4 (Wall
Street Prep) – 2025 Update | 100 Actual
Questions with Verified Correct Answers &
Expert Rationales | A+ Graded
Student Name: _________________________
Date: _______________
Time Limit: 90 minutes
Total Questions: 50
Financial Statements (10 Questions)
1. MCQ: Tesla, Inc. reports $10 million in net income on its 2025 income statement. Where
is this figure also reflected?
a. Balance sheet as cash
b. Statement of retained earnings
c. Cash flow statement as operating cash
d. Statement of comprehensive income only
Rationale: Net income is transferred to the statement of retained earnings, impacting the
retained earnings balance on the balance sheet, per GAAP principles.
2. MCQ: Apple Inc.’s balance sheet shows $50 billion in total assets. Which equation must
balance?
a. Assets = Liabilities + Revenue
b. Assets = Liabilities + Shareholders’ Equity
c. Assets = Revenue – Expenses
d. Assets = Cash + Equity
Rationale: The accounting equation (Assets = Liabilities + Shareholders’ Equity) ensures
the balance sheet remains balanced, per GAAP.
3. MCQ: Amazon’s 2025 cash flow statement shows a $5 million increase in accounts
receivable. How is this classified?
a. Investing activity
b. Operating activity
c. Financing activity
d. Non-cash activity
Rationale: Changes in accounts receivable are part of operating activities, as they relate to
core business operations, per GAAP.
4. MCQ: Microsoft’s income statement reports $2 billion in revenue. Where is this first
recorded?
a. Balance sheet
, 2
b. Income statement
c. Cash flow statement
d. Statement of equity
Rationale: Revenue is recognized on the income statement when earned, per the revenue
recognition principle in GAAP.
5. MCQ: Coca-Cola’s balance sheet lists $1 million in accrued expenses. This is classified
as:
a. Long-term debt
b. Current liability
c. Equity
d. Non-current asset
Rationale: Accrued expenses are short-term obligations due within one year, classified as
current liabilities, per GAAP.
6. MCQ: Walmart’s statement of cash flows uses the indirect method. What is adjusted in
operating activities?
a. Capital expenditures
b. Net income
c. Dividend payments
d. Debt issuance
Rationale: The indirect method starts with net income and adjusts for non-cash items and
working capital changes, per GAAP.
7. MCQ: Nike’s 2025 financials show $500,000 in depreciation expense. Where is this
reported?
a. Balance sheet
b. Income statement
c. Statement of equity
d. Cash flow statement only
Rationale: Depreciation expense reduces net income on the income statement, per
GAAP’s matching principle.
8. MCQ: PepsiCo’s shareholders’ equity includes $10 million in common stock. Where is
this reported?
a. Income statement
b. Balance sheet
c. Cash flow statement
d. Statement of cash flows
Rationale: Common stock is a component of shareholders’ equity on the balance sheet,
per GAAP.
9. MCQ: Google’s 2025 financials show $3 million in accounts payable. This represents:
a. Revenue earned
b. Amounts owed to suppliers
c. Cash reserves
d. Long-term investments
Rationale: Accounts payable are current liabilities for goods or services received but not
yet paid, per GAAP.
10. MCQ: Starbucks’ statement of retained earnings shows a $2 million dividend payment.
How does this affect equity?
Accounting Crash Course Exam V4 (Wall
Street Prep) – 2025 Update | 100 Actual
Questions with Verified Correct Answers &
Expert Rationales | A+ Graded
Student Name: _________________________
Date: _______________
Time Limit: 90 minutes
Total Questions: 50
Financial Statements (10 Questions)
1. MCQ: Tesla, Inc. reports $10 million in net income on its 2025 income statement. Where
is this figure also reflected?
a. Balance sheet as cash
b. Statement of retained earnings
c. Cash flow statement as operating cash
d. Statement of comprehensive income only
Rationale: Net income is transferred to the statement of retained earnings, impacting the
retained earnings balance on the balance sheet, per GAAP principles.
2. MCQ: Apple Inc.’s balance sheet shows $50 billion in total assets. Which equation must
balance?
a. Assets = Liabilities + Revenue
b. Assets = Liabilities + Shareholders’ Equity
c. Assets = Revenue – Expenses
d. Assets = Cash + Equity
Rationale: The accounting equation (Assets = Liabilities + Shareholders’ Equity) ensures
the balance sheet remains balanced, per GAAP.
3. MCQ: Amazon’s 2025 cash flow statement shows a $5 million increase in accounts
receivable. How is this classified?
a. Investing activity
b. Operating activity
c. Financing activity
d. Non-cash activity
Rationale: Changes in accounts receivable are part of operating activities, as they relate to
core business operations, per GAAP.
4. MCQ: Microsoft’s income statement reports $2 billion in revenue. Where is this first
recorded?
a. Balance sheet
, 2
b. Income statement
c. Cash flow statement
d. Statement of equity
Rationale: Revenue is recognized on the income statement when earned, per the revenue
recognition principle in GAAP.
5. MCQ: Coca-Cola’s balance sheet lists $1 million in accrued expenses. This is classified
as:
a. Long-term debt
b. Current liability
c. Equity
d. Non-current asset
Rationale: Accrued expenses are short-term obligations due within one year, classified as
current liabilities, per GAAP.
6. MCQ: Walmart’s statement of cash flows uses the indirect method. What is adjusted in
operating activities?
a. Capital expenditures
b. Net income
c. Dividend payments
d. Debt issuance
Rationale: The indirect method starts with net income and adjusts for non-cash items and
working capital changes, per GAAP.
7. MCQ: Nike’s 2025 financials show $500,000 in depreciation expense. Where is this
reported?
a. Balance sheet
b. Income statement
c. Statement of equity
d. Cash flow statement only
Rationale: Depreciation expense reduces net income on the income statement, per
GAAP’s matching principle.
8. MCQ: PepsiCo’s shareholders’ equity includes $10 million in common stock. Where is
this reported?
a. Income statement
b. Balance sheet
c. Cash flow statement
d. Statement of cash flows
Rationale: Common stock is a component of shareholders’ equity on the balance sheet,
per GAAP.
9. MCQ: Google’s 2025 financials show $3 million in accounts payable. This represents:
a. Revenue earned
b. Amounts owed to suppliers
c. Cash reserves
d. Long-term investments
Rationale: Accounts payable are current liabilities for goods or services received but not
yet paid, per GAAP.
10. MCQ: Starbucks’ statement of retained earnings shows a $2 million dividend payment.
How does this affect equity?
