Accounting Crash Course Exam from Wall Street
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Latest 2025/2026 Guide
Question 1
Assume US GAAP to answer this question.
In 2017, $2 million in wages were earned and no cash wages were paid.
In 2018, $8 million in wages were earned and $7 million in cash wages were paid.
Cash wages were used to first pay wages earned in 2017 with the remainder used to pay
wages earned in 2018.
Any earned but unpaid wages will be paid during the first quarter of 2019.
Using only the information provided, which of the following statements is most accurate?
Liabilities increased by $1.0 million in 2018
Liabilities increased by $3.0 million in 2018
Assets decreased by $5.0 million in 2018
Retained earnings decreased by $10.0 million in 2018
Retained earnings decreased by $7.0 million in 2018
Question 2
A company reported gross profit of $20 million in 2018. In addition, it recorded the following activities:
Sales and marketing expenses were $5 million.
Interest income was $2 million.
Sold equipment for $5 million that had a net book value of $9 million.
$3 million in preferred stock issuance.
Company’s tax rate is 40%.
Calculate the company’s net income.
$5.4 million
$6.0 million
$6.8 million
$7.2 million
$7.8 million
, Question 3
The next two questions use the following data from TGX Global, a heavy equipment manufacturer
(this information will be repeated on the next question):
TGX Global sells excavators, with an average sale price of $500,000 per excavator.
TGX produced & delivered 120 excavators in 2018: 50 excavators were ordered in 2017 and the
rest (70 excavators) were ordered in 2018.
TGX received payment for 110 excavators.
TGX began selling 1-year maintenance services contracts for $50,000 per excavator in 2018,
which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders
made in 2018 (no contracts were sold on orders placed in 2017).
Assume all excavators delivered in 2018 are delivered at year end, calculate TGXʼs 2018 revenue
based on the transactions described above.
$45.0 million
$55.0 million
$60.0 million
$61.0 million
$66.0 million
i i
Prep | Questions and Verified Answers Rated A+ |
Latest 2025/2026 Guide
Question 1
Assume US GAAP to answer this question.
In 2017, $2 million in wages were earned and no cash wages were paid.
In 2018, $8 million in wages were earned and $7 million in cash wages were paid.
Cash wages were used to first pay wages earned in 2017 with the remainder used to pay
wages earned in 2018.
Any earned but unpaid wages will be paid during the first quarter of 2019.
Using only the information provided, which of the following statements is most accurate?
Liabilities increased by $1.0 million in 2018
Liabilities increased by $3.0 million in 2018
Assets decreased by $5.0 million in 2018
Retained earnings decreased by $10.0 million in 2018
Retained earnings decreased by $7.0 million in 2018
Question 2
A company reported gross profit of $20 million in 2018. In addition, it recorded the following activities:
Sales and marketing expenses were $5 million.
Interest income was $2 million.
Sold equipment for $5 million that had a net book value of $9 million.
$3 million in preferred stock issuance.
Company’s tax rate is 40%.
Calculate the company’s net income.
$5.4 million
$6.0 million
$6.8 million
$7.2 million
$7.8 million
, Question 3
The next two questions use the following data from TGX Global, a heavy equipment manufacturer
(this information will be repeated on the next question):
TGX Global sells excavators, with an average sale price of $500,000 per excavator.
TGX produced & delivered 120 excavators in 2018: 50 excavators were ordered in 2017 and the
rest (70 excavators) were ordered in 2018.
TGX received payment for 110 excavators.
TGX began selling 1-year maintenance services contracts for $50,000 per excavator in 2018,
which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders
made in 2018 (no contracts were sold on orders placed in 2017).
Assume all excavators delivered in 2018 are delivered at year end, calculate TGXʼs 2018 revenue
based on the transactions described above.
$45.0 million
$55.0 million
$60.0 million
$61.0 million
$66.0 million
i i
