Investment Banking 400 -
Accounting Questions 2026
Exam All Answers and
Illustrations Given
What is the primary purpose of US GAAP? - 🧠 ANSWER ✔✔In the US, the
Securities and Exchange Commission ("SEC") authorizes the Financial
Accounting Standards Board ("FASB") to determine the set of accounting
rules followed by publicly traded companies. Under FASB, financial
statements are required to be prepared in accordance with US Generally
,Accepted Accounting Principles ("US GAAP"). Through the standardization
of financial reporting and ensuring all financials are presented on a fair,
consistent basis - the interests of investors and lenders are protected.
What are the main sections of a 10-K? - 🧠 ANSWER ✔✔In a 10-K, you'll
find the three core financial statements, which are the income statement,
cash flow statement, and balance sheet. There'll also be a statement of
shareholders' equity, a statement of comprehensive income, and
supplementary data and disclosures to accompany the financials.
What is the difference between the 10-K and 10-Q? - 🧠 ANSWER ✔✔- 10-
K: A 10-K is the annual report required to be filed with the SEC for any
public company in the U.S. The report is comprehensive and includes a full
overview of the business operations, commentary on recent performance
by management, risk factors, disclosures on changes in accounting policies
- and most importantly, the three core financial statements with
supplementary data.
- 10-Q: A 10-Q refers to the quarterly report required to be filed with the
SEC. Compared to the 10-K, this report is far more condensed in length
,and depth, with the focus being on the quarterly financials with brief
sections for MD&A and supplementary disclosures.
- Additional Differences: A few more differences are 10-Ks are required to
be audited by an independent accounting firm, but 10-Qs are only reviewed
by CPAs and left unaudited. 10-Ks must also be filed ~60-90 days after the
fiscal year ends, whereas 10-Qs must be submitted ~40-45 days after the
quarter ends.
Walk me through the three financial statements. - 🧠 ANSWER ✔✔1.
Income Statement ("IS"): The income statement shows a company's
profitability over a specified period, typically quarterly and annually. The
beginning line item is revenue and upon deducting various costs and
expenses, the ending line item is net income.
2. Balance Sheet ("BS"): The balance sheet is a snapshot of a company's
resources (assets) and sources of funding (liabilities and shareholders'
equity) at a specific point in time, such as the end of a quarter or fiscal
year.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, 3. Cash Flow Statement ("CFS"): Under the indirect approach, the starting
line item is net income, which will be adjusted for non-cash items such as
D&A and changes in working capital to arrive at cash from operations.
Cash from investing and financing activities are then added to cash from
operations to arrive at the net change in cash, which represents the actual
cash inflows/(outflows) in a given period.
Walk me through the income statement - 🧠 ANSWER ✔✔The income
statement shows a company's accrual-based profitability over a specified
time period and facilitates the analysis of its historical growth and
operational performance. The table below lists the major income and
expense components of the income statement:
Walk me through the balance sheet - 🧠 ANSWER ✔✔The balance sheet
shows a company's assets, liabilities, and equity sections at a specific point
in time. The fundamental accounting equation is: Assets = Liabilities +
Shareholders' Equity. The assets belonging to a company must have been
funded somehow, so assets will always be equal to the sum of liabilities
and equity.
Accounting Questions 2026
Exam All Answers and
Illustrations Given
What is the primary purpose of US GAAP? - 🧠 ANSWER ✔✔In the US, the
Securities and Exchange Commission ("SEC") authorizes the Financial
Accounting Standards Board ("FASB") to determine the set of accounting
rules followed by publicly traded companies. Under FASB, financial
statements are required to be prepared in accordance with US Generally
,Accepted Accounting Principles ("US GAAP"). Through the standardization
of financial reporting and ensuring all financials are presented on a fair,
consistent basis - the interests of investors and lenders are protected.
What are the main sections of a 10-K? - 🧠 ANSWER ✔✔In a 10-K, you'll
find the three core financial statements, which are the income statement,
cash flow statement, and balance sheet. There'll also be a statement of
shareholders' equity, a statement of comprehensive income, and
supplementary data and disclosures to accompany the financials.
What is the difference between the 10-K and 10-Q? - 🧠 ANSWER ✔✔- 10-
K: A 10-K is the annual report required to be filed with the SEC for any
public company in the U.S. The report is comprehensive and includes a full
overview of the business operations, commentary on recent performance
by management, risk factors, disclosures on changes in accounting policies
- and most importantly, the three core financial statements with
supplementary data.
- 10-Q: A 10-Q refers to the quarterly report required to be filed with the
SEC. Compared to the 10-K, this report is far more condensed in length
,and depth, with the focus being on the quarterly financials with brief
sections for MD&A and supplementary disclosures.
- Additional Differences: A few more differences are 10-Ks are required to
be audited by an independent accounting firm, but 10-Qs are only reviewed
by CPAs and left unaudited. 10-Ks must also be filed ~60-90 days after the
fiscal year ends, whereas 10-Qs must be submitted ~40-45 days after the
quarter ends.
Walk me through the three financial statements. - 🧠 ANSWER ✔✔1.
Income Statement ("IS"): The income statement shows a company's
profitability over a specified period, typically quarterly and annually. The
beginning line item is revenue and upon deducting various costs and
expenses, the ending line item is net income.
2. Balance Sheet ("BS"): The balance sheet is a snapshot of a company's
resources (assets) and sources of funding (liabilities and shareholders'
equity) at a specific point in time, such as the end of a quarter or fiscal
year.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, 3. Cash Flow Statement ("CFS"): Under the indirect approach, the starting
line item is net income, which will be adjusted for non-cash items such as
D&A and changes in working capital to arrive at cash from operations.
Cash from investing and financing activities are then added to cash from
operations to arrive at the net change in cash, which represents the actual
cash inflows/(outflows) in a given period.
Walk me through the income statement - 🧠 ANSWER ✔✔The income
statement shows a company's accrual-based profitability over a specified
time period and facilitates the analysis of its historical growth and
operational performance. The table below lists the major income and
expense components of the income statement:
Walk me through the balance sheet - 🧠 ANSWER ✔✔The balance sheet
shows a company's assets, liabilities, and equity sections at a specific point
in time. The fundamental accounting equation is: Assets = Liabilities +
Shareholders' Equity. The assets belonging to a company must have been
funded somehow, so assets will always be equal to the sum of liabilities
and equity.
