WALL STREET PREP ACCOUNTING EXAM
STUDY GUIDE EXAM WITH CORRECT
QUESTIONS AND CORRECTRY ANALYZED
ANSWERS (ACTUAL EXAM) ALREADY
GRADED A+ LATEST 2025 – 2026
PP&E - ANSWERS-Represents land, buildings, and machinery used to
manufacture the company's services and products plus all costs necessary to
prepare those fixed assets for their service (transportation, installation, other)
PP&E cycles out of the B/S and into the I/S as _________(either in COGS, SG&A
or elsewhere) - ANSWERS-depreciation
Net purchases of PP&E are called _______ - ANSWERS-capital expenditures
,Impact of PP&E on B/S: at purchase - ANSWERS-Debit > asset > PP&E
Credit > asset > cash
Impact of PP&E on B/S: after one year - ANSWERS-Debit > equity > retained
earnings (depreciation)
Credit > Asset > PP&E (depreciation)
Net PP&E = - ANSWERS-Gross PP&E - accumulated depreciation
Accumulated depreciation is a _________ - ANSWERS-contra account
Increases in a contra account ________associated asset amount - ANSWERS-
reduce
PP&E is reported ____________ - ANSWERS-net of accumulated depreciation
DSO (Days Sales Outstanding) - ANSWERS-AR/Credit Sales * days in period
days in period/receivables turnover
A/P turnover - ANSWERS-COGS / Average A/P
PPP (payables purchasing period) - ANSWERS-days in period/ Accounts payable
turnover
, Current Ratio - ANSWERS-current assets/current liabilities
Quick ratio (acid test) - ANSWERS-Cash and AR divided by current liabilities
Gross profit margin - ANSWERS-gross profit/revenue
operating margin - ANSWERS-operating profit/revenue
net profit margin - ANSWERS-net income/revenue
asset turnover - ANSWERS-revenue/ average assets
return on assets (ROA) - ANSWERS-Net Income / Average Assets
return on equity (ROE) - ANSWERS-net income/ total equity
Basic EPS - ANSWERS-(Net Income - Preferred Dividends)/(Weighted Average of
Shares Outstanding)
Diluted EPS - ANSWERS-diluted net income / weighted average diluted shares
outstanding
STUDY GUIDE EXAM WITH CORRECT
QUESTIONS AND CORRECTRY ANALYZED
ANSWERS (ACTUAL EXAM) ALREADY
GRADED A+ LATEST 2025 – 2026
PP&E - ANSWERS-Represents land, buildings, and machinery used to
manufacture the company's services and products plus all costs necessary to
prepare those fixed assets for their service (transportation, installation, other)
PP&E cycles out of the B/S and into the I/S as _________(either in COGS, SG&A
or elsewhere) - ANSWERS-depreciation
Net purchases of PP&E are called _______ - ANSWERS-capital expenditures
,Impact of PP&E on B/S: at purchase - ANSWERS-Debit > asset > PP&E
Credit > asset > cash
Impact of PP&E on B/S: after one year - ANSWERS-Debit > equity > retained
earnings (depreciation)
Credit > Asset > PP&E (depreciation)
Net PP&E = - ANSWERS-Gross PP&E - accumulated depreciation
Accumulated depreciation is a _________ - ANSWERS-contra account
Increases in a contra account ________associated asset amount - ANSWERS-
reduce
PP&E is reported ____________ - ANSWERS-net of accumulated depreciation
DSO (Days Sales Outstanding) - ANSWERS-AR/Credit Sales * days in period
days in period/receivables turnover
A/P turnover - ANSWERS-COGS / Average A/P
PPP (payables purchasing period) - ANSWERS-days in period/ Accounts payable
turnover
, Current Ratio - ANSWERS-current assets/current liabilities
Quick ratio (acid test) - ANSWERS-Cash and AR divided by current liabilities
Gross profit margin - ANSWERS-gross profit/revenue
operating margin - ANSWERS-operating profit/revenue
net profit margin - ANSWERS-net income/revenue
asset turnover - ANSWERS-revenue/ average assets
return on assets (ROA) - ANSWERS-Net Income / Average Assets
return on equity (ROE) - ANSWERS-net income/ total equity
Basic EPS - ANSWERS-(Net Income - Preferred Dividends)/(Weighted Average of
Shares Outstanding)
Diluted EPS - ANSWERS-diluted net income / weighted average diluted shares
outstanding
