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Wall Street Prep Accounting Crash Course Exam (Version 1 &
2) Includes Accurate And Verified Questions And Answers
Exam A+ Graded ||Just Out!!!
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?
A) $50 million debit to inventory and $50 million credit to
retained earnings
B) $50 million debit to inventory and $50 million credit to cash
C) $50 million credit to inventory and $50 million debit to
retained earnings
D) $50 million credit to inventory and $50 million debit to cash -
ANSWER-C) $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?
A) When the company sells the equipment, it will recognize a
$15 million gain on sale on the income statement.
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B) When the company sells the equipment, it will recognize a $5
million loss on sale on the income statement.
C) When the company sells the equipment, it will recognize a
$25 million gain on sale on the income statement.
D) When the company sells the equipment, it will recognize a
$45 million gain on sale on the income statement. - ANSWER-C)
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 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? -
ANSWER-$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?
A) An increase in an asset and a decrease in an asset.
B) A decrease in stockholders' equity and a decrease in an asset.
C) An increase in a liability and a decrease in an asset.
D) An increase in stockholders' equity and an increase in an
asset. - ANSWER-C) An increase in a liability and a decrease in
an asset.
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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?
A) $150,000 assets, $60,000 liabilities, $90,000 Stockholder's
Equity
B) $155,000 assets, $65,000 liabilities, $90,000 Stockholder's
Equity
C) $160,000 assets, $75,000 liabilities, $85,000 Stockholder's
Equity
D) $170,000 assets, $100,000 liabilities, $70,000 Stockholder's
Equity - ANSWER-Option B) $155,000 assets, $65,000 liabilities,
$90,000 Stockholder's Equity
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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:
1. The company issued stock and collected cash totaling
$30,000.
2. The company paid an account payable of $6,000.
3. The company purchased supplies for $1,000 with cash.
4. 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?
- ANSWER-$110,000
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? - ANSWER-$10,000
Wall Street Prep Accounting Crash Course Exam (Version 1 &
2) Includes Accurate And Verified Questions And Answers
Exam A+ Graded ||Just Out!!!
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?
A) $50 million debit to inventory and $50 million credit to
retained earnings
B) $50 million debit to inventory and $50 million credit to cash
C) $50 million credit to inventory and $50 million debit to
retained earnings
D) $50 million credit to inventory and $50 million debit to cash -
ANSWER-C) $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?
A) When the company sells the equipment, it will recognize a
$15 million gain on sale on the income statement.
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B) When the company sells the equipment, it will recognize a $5
million loss on sale on the income statement.
C) When the company sells the equipment, it will recognize a
$25 million gain on sale on the income statement.
D) When the company sells the equipment, it will recognize a
$45 million gain on sale on the income statement. - ANSWER-C)
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 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? -
ANSWER-$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?
A) An increase in an asset and a decrease in an asset.
B) A decrease in stockholders' equity and a decrease in an asset.
C) An increase in a liability and a decrease in an asset.
D) An increase in stockholders' equity and an increase in an
asset. - ANSWER-C) An increase in a liability and a decrease in
an asset.
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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?
A) $150,000 assets, $60,000 liabilities, $90,000 Stockholder's
Equity
B) $155,000 assets, $65,000 liabilities, $90,000 Stockholder's
Equity
C) $160,000 assets, $75,000 liabilities, $85,000 Stockholder's
Equity
D) $170,000 assets, $100,000 liabilities, $70,000 Stockholder's
Equity - ANSWER-Option B) $155,000 assets, $65,000 liabilities,
$90,000 Stockholder's Equity
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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:
1. The company issued stock and collected cash totaling
$30,000.
2. The company paid an account payable of $6,000.
3. The company purchased supplies for $1,000 with cash.
4. 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?
- ANSWER-$110,000
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? - ANSWER-$10,000
