1
WALL STREET PREP ACCOUNTING EXAM STUDY
GUIDE EXAM WITH CORRECT QUESTIONS AND
CORRECTRY ANALYZED ANSWERS (ACTUAL EXAM)
ALREADY GRADED A+ LATEST 2025 – 2026
What is the primary purpose of US GAAP? - ...(ANSWERS)....To ensure all financial
information is presented on a fair, consistent basis
What are the main sectinos of a 10-K? - ...(ANSWERS)....Business Overview,
Management's Discussion and Analysis, Financial Statements, Notes
What's the difference between the 10-K and 10-Q? - ...(ANSWERS)....While the
10-K is an annual report required to be filed with the SEC, the 10-Q is quarterly.
The 10-K also includes much more information about the business operations,
commentary on recent performance, risk factors
Walk me through the three financial statements - ...(ANSWERS)....
Could you give further context on what assets, liabilties, and equity each
represent? - ...(ANSWERS)....Assets - Resources with economic value that can be
sold for money or bring positive monetary benefits in the future
Liabilties - Unsettled obligations to another party in the future
Equity - Capital invested in the business and internal sources of capital that
helped fund assets
, 2
APIC - ...(ANSWERS)....APIC represents the amount received in excess over the
par value from the sale of preferred or common stock
Why is the income statement insufficient to assess the liquidity of a company? -
...(ANSWERS)....The income statement can be misleading because it doesn't
include many cash expenses included on cash flow statement
What are some discretionary management decisions that could inflate earnings? -
...(ANSWERS)....Switching from LIFO to FIFO if inventory costs are expected to rise
Repurchasing shares to decrease share count and increase EPS
What is the difference between COGS and operating expenses? -
...(ANSWERS)....COGS represents the direct costs associated with the production
of the goods sold to generate revenue, while Operating Expenses are not directly
associated with the production of goods / services offered
When do you capitalize vs expense items under accrual accounting -
...(ANSWERS)....Capitalized: Expenditures on fixed and tangible assets with a
useful life greater than one year must be capitalized and expensed over time
Expensed: When the benefits received are short-term, the related expenses
should be incurred in the same period
If depreciation is a non-cash expense, how does it affect net income? -
...(ANSWERS)....The expense is tax-deductible and reduces the tax burden
WALL STREET PREP ACCOUNTING EXAM STUDY
GUIDE EXAM WITH CORRECT QUESTIONS AND
CORRECTRY ANALYZED ANSWERS (ACTUAL EXAM)
ALREADY GRADED A+ LATEST 2025 – 2026
What is the primary purpose of US GAAP? - ...(ANSWERS)....To ensure all financial
information is presented on a fair, consistent basis
What are the main sectinos of a 10-K? - ...(ANSWERS)....Business Overview,
Management's Discussion and Analysis, Financial Statements, Notes
What's the difference between the 10-K and 10-Q? - ...(ANSWERS)....While the
10-K is an annual report required to be filed with the SEC, the 10-Q is quarterly.
The 10-K also includes much more information about the business operations,
commentary on recent performance, risk factors
Walk me through the three financial statements - ...(ANSWERS)....
Could you give further context on what assets, liabilties, and equity each
represent? - ...(ANSWERS)....Assets - Resources with economic value that can be
sold for money or bring positive monetary benefits in the future
Liabilties - Unsettled obligations to another party in the future
Equity - Capital invested in the business and internal sources of capital that
helped fund assets
, 2
APIC - ...(ANSWERS)....APIC represents the amount received in excess over the
par value from the sale of preferred or common stock
Why is the income statement insufficient to assess the liquidity of a company? -
...(ANSWERS)....The income statement can be misleading because it doesn't
include many cash expenses included on cash flow statement
What are some discretionary management decisions that could inflate earnings? -
...(ANSWERS)....Switching from LIFO to FIFO if inventory costs are expected to rise
Repurchasing shares to decrease share count and increase EPS
What is the difference between COGS and operating expenses? -
...(ANSWERS)....COGS represents the direct costs associated with the production
of the goods sold to generate revenue, while Operating Expenses are not directly
associated with the production of goods / services offered
When do you capitalize vs expense items under accrual accounting -
...(ANSWERS)....Capitalized: Expenditures on fixed and tangible assets with a
useful life greater than one year must be capitalized and expensed over time
Expensed: When the benefits received are short-term, the related expenses
should be incurred in the same period
If depreciation is a non-cash expense, how does it affect net income? -
...(ANSWERS)....The expense is tax-deductible and reduces the tax burden
