Financial Accounting Exam Review & Study Guide 100 Practice
Problems with Worked Solutions & Rationales 2026/2027
Practice case 1
Accounting equation
A company starts with assets $120,000 and liabilities $45,000. Analyze each change
sequentially: owner cash contribution $15,000; cash borrowing $20,000; then earned
revenue $12,000 and incurred expenses $7,000. There are no dividends.
1. Find opening equity.
Working or response
2. Find assets and equity after the contribution.
Working or response
3. Find assets, liabilities, and equity after borrowing.
Working or response
4. Find net income from the final operating activity.
Working or response
5. Find final equity.
Working or response
,Practice case 2
Journal entries
Record each independent transaction using ordinary U.S. introductory accounting
conventions. No taxes or discounts apply.
6. Issue common shares for $40,000 cash with no par-value allocation required.
Working or response
7. Buy equipment for $18,000 cash.
Working or response
8. Buy supplies on account for $2,500.
Working or response
9. Collect $3,000 of an existing account receivable.
Working or response
10. Pay $1,200 of an existing account payable.
Working or response
,Practice case 3
Accrued adjustments
Prepare the adjusting entries for each independent year-end situation. All amounts are
dollars.
11. Services worth 4,000 were earned but not yet billed.
Working or response
12. Employees earned 1,200 of wages not yet paid.
Working or response
13. A 12,000 note payable at 6% annual interest has accrued 3 months of
interest.
Working or response
14. Supplies have an unadjusted debit balance 1,500 and a physical count value
400.
Working or response
15. Before these four adjustments, net income was 20,000. Find adjusted net
income.
Working or response
, Practice case 4
Prepayments and advances
Use the asset method for prepayments and liability method for customer advances.
Each question is independent unless stated.
16. Insurance of $12,000 covers 12 months; 3 months have expired. Find
insurance expense.
Working or response
17. For that insurance, find remaining prepaid insurance.
Working or response
18. A customer advance of $6,000 covers 6 equal months of service; 2 months
are completed. Record the adjustment.
Working or response
19. After that service adjustment, find the unearned balance.
Working or response
20. Rent of $9,000 for 3 months was paid and initially recorded as prepaid; 1
month has expired. Record the adjustment.
Working or response
Problems with Worked Solutions & Rationales 2026/2027
Practice case 1
Accounting equation
A company starts with assets $120,000 and liabilities $45,000. Analyze each change
sequentially: owner cash contribution $15,000; cash borrowing $20,000; then earned
revenue $12,000 and incurred expenses $7,000. There are no dividends.
1. Find opening equity.
Working or response
2. Find assets and equity after the contribution.
Working or response
3. Find assets, liabilities, and equity after borrowing.
Working or response
4. Find net income from the final operating activity.
Working or response
5. Find final equity.
Working or response
,Practice case 2
Journal entries
Record each independent transaction using ordinary U.S. introductory accounting
conventions. No taxes or discounts apply.
6. Issue common shares for $40,000 cash with no par-value allocation required.
Working or response
7. Buy equipment for $18,000 cash.
Working or response
8. Buy supplies on account for $2,500.
Working or response
9. Collect $3,000 of an existing account receivable.
Working or response
10. Pay $1,200 of an existing account payable.
Working or response
,Practice case 3
Accrued adjustments
Prepare the adjusting entries for each independent year-end situation. All amounts are
dollars.
11. Services worth 4,000 were earned but not yet billed.
Working or response
12. Employees earned 1,200 of wages not yet paid.
Working or response
13. A 12,000 note payable at 6% annual interest has accrued 3 months of
interest.
Working or response
14. Supplies have an unadjusted debit balance 1,500 and a physical count value
400.
Working or response
15. Before these four adjustments, net income was 20,000. Find adjusted net
income.
Working or response
, Practice case 4
Prepayments and advances
Use the asset method for prepayments and liability method for customer advances.
Each question is independent unless stated.
16. Insurance of $12,000 covers 12 months; 3 months have expired. Find
insurance expense.
Working or response
17. For that insurance, find remaining prepaid insurance.
Working or response
18. A customer advance of $6,000 covers 6 equal months of service; 2 months
are completed. Record the adjustment.
Working or response
19. After that service adjustment, find the unearned balance.
Working or response
20. Rent of $9,000 for 3 months was paid and initially recorded as prepaid; 1
month has expired. Record the adjustment.
Working or response
