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ACCOUNTING CRASH COURSE ACTUAL EXAM 2025 NEWEST FROM
WALL STREET PREP 160 QUESTIONS WITH DETAILED VERIFIED
ANSWERS / WSP ACCOUNTING CRASHCOURSE ACTUAL LATEST
EXAM/ WALLSTREET PREP
Which of the following statements is FALSE?
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Collecting cash after delivery of a good or service does not create revenue on the income
statement on the date of collection.
Revenue is recognized at the time of delivery of the goods or services regardless of if cash is
received.
A liability is created when cash is received prior to delivery of the goods or services. - ANSWER-
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Revenue is recognized at the time of delivery of goods and services regardless of when the cash
is received.
Clayton Corp. has provided the following information:
Gross profit was $620,000;
Cost of goods sold was $380,000;
Net income was $400,000.
What was Clayton's gross profit margin?
40%
61.3%
62%
155% - ANSWER-62%
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Gross profit ($620,000) equals sales (X) minus cost of goods sold ($380,000).
Therefore, Sales = Gross profit ($620,000) plus Cost of goods sold ($380,000).
Sales = $1,000,000.
Gross profit percentage = Gross profit divided by Sales = $620,000 ÷ $1,000,000 = 62%.
Clayton Corp. has provided the following information:
Operating (excluding COGS) expenses were $345,000;
Operating income was $215,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss on sale of investments was $87,000;
Income tax expense was $58,000.
What was Clayton's gross profit?
$618,000
$469,000
$540,000
$560,000 - ANSWER-$618,000
Gross profit equals net sales less cost of goods sold. The other way to look at it is to work
backwards, realizing that:
Operating income = Net sales - All operating expenses
Since you're given operating income and all operating expenses other than COGS, you can
simply add back operating expenses to operating income to arrive at gross profit:
Gross profit ($560,000) equals operating expenses ($345,000) plus Operating Income
($215,000).
Interest expense is recognized on the income statement below operating income, as are income
taxes and loss on investments, which therefore have no impact on gross profit.
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The regulating body that oversees the development of accounting standards in the U.S. is:
SFAS
GAAP
FASB
IASB - ANSWER-FASB formulates accounting standards through the issuance of Statements of
Financial Accounting Standards (SFAS). These statements make up the body of accounting rules
known as the Generally Accepted Accounting Principles (GAAP). IASB oversees international
financial reporting standards (IFRS).
Which of the following statements is TRUE?
GAAP requires that firms show recorded values for acquired intangible assets such as patents
and trademarks on their financial statements.
GAAP requires that firms show recorded values for intangible assets such as employee and
customer loyalty.
GAAP requires that financial statements accurately reflects the market value of internally-
developed trademarks such as the value of the Coca-Cola brand name.
All of the above. - ANSWER-GAAP requires that firms show recorded values for acquired
intangible assets such as patents and trademarks on their financial statements. GAAP requires
that firms only show measurable activities, such as the value of acquired intangible assets.
Assets such as employee, customer loyalty and internally-developed trademarks are not shown
on financial statements because they're difficult to quantify.
Which of the following statements is TRUE?
Publicly traded US companies are required to file four 10-Q's and one 10-K annually.
All US companies are required to file three 10-Q's and one 10-K annually.
Publicly traded US companies are required to file three 10-Q's and one 10-K annually.
Publicly traded US companies are required to file one 10-K annually; 10-Q's are typically filed
but are technically voluntary. - ANSWER-Publicly traded US companies are required to file three
10-Q's and one 10-K annually.
ACCOUNTING CRASH COURSE ACTUAL EXAM 2025 NEWEST FROM
WALL STREET PREP 160 QUESTIONS WITH DETAILED VERIFIED
ANSWERS / WSP ACCOUNTING CRASHCOURSE ACTUAL LATEST
EXAM/ WALLSTREET PREP
Which of the following statements is FALSE?
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Collecting cash after delivery of a good or service does not create revenue on the income
statement on the date of collection.
Revenue is recognized at the time of delivery of the goods or services regardless of if cash is
received.
A liability is created when cash is received prior to delivery of the goods or services. - ANSWER-
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Revenue is recognized at the time of delivery of goods and services regardless of when the cash
is received.
Clayton Corp. has provided the following information:
Gross profit was $620,000;
Cost of goods sold was $380,000;
Net income was $400,000.
What was Clayton's gross profit margin?
40%
61.3%
62%
155% - ANSWER-62%
,2|Page
Gross profit ($620,000) equals sales (X) minus cost of goods sold ($380,000).
Therefore, Sales = Gross profit ($620,000) plus Cost of goods sold ($380,000).
Sales = $1,000,000.
Gross profit percentage = Gross profit divided by Sales = $620,000 ÷ $1,000,000 = 62%.
Clayton Corp. has provided the following information:
Operating (excluding COGS) expenses were $345,000;
Operating income was $215,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss on sale of investments was $87,000;
Income tax expense was $58,000.
What was Clayton's gross profit?
$618,000
$469,000
$540,000
$560,000 - ANSWER-$618,000
Gross profit equals net sales less cost of goods sold. The other way to look at it is to work
backwards, realizing that:
Operating income = Net sales - All operating expenses
Since you're given operating income and all operating expenses other than COGS, you can
simply add back operating expenses to operating income to arrive at gross profit:
Gross profit ($560,000) equals operating expenses ($345,000) plus Operating Income
($215,000).
Interest expense is recognized on the income statement below operating income, as are income
taxes and loss on investments, which therefore have no impact on gross profit.
, 3|Page
The regulating body that oversees the development of accounting standards in the U.S. is:
SFAS
GAAP
FASB
IASB - ANSWER-FASB formulates accounting standards through the issuance of Statements of
Financial Accounting Standards (SFAS). These statements make up the body of accounting rules
known as the Generally Accepted Accounting Principles (GAAP). IASB oversees international
financial reporting standards (IFRS).
Which of the following statements is TRUE?
GAAP requires that firms show recorded values for acquired intangible assets such as patents
and trademarks on their financial statements.
GAAP requires that firms show recorded values for intangible assets such as employee and
customer loyalty.
GAAP requires that financial statements accurately reflects the market value of internally-
developed trademarks such as the value of the Coca-Cola brand name.
All of the above. - ANSWER-GAAP requires that firms show recorded values for acquired
intangible assets such as patents and trademarks on their financial statements. GAAP requires
that firms only show measurable activities, such as the value of acquired intangible assets.
Assets such as employee, customer loyalty and internally-developed trademarks are not shown
on financial statements because they're difficult to quantify.
Which of the following statements is TRUE?
Publicly traded US companies are required to file four 10-Q's and one 10-K annually.
All US companies are required to file three 10-Q's and one 10-K annually.
Publicly traded US companies are required to file three 10-Q's and one 10-K annually.
Publicly traded US companies are required to file one 10-K annually; 10-Q's are typically filed
but are technically voluntary. - ANSWER-Publicly traded US companies are required to file three
10-Q's and one 10-K annually.
