ACCOUNTING CRASH COURSE 2024 NEWEST
ACTUAL EXAM COMPLETE 190 QUESTIONS
AND CORRECT ANSWERS RATED A /
WALLSTREET PREP ACCOUNTING CRASH
COURSE EXAM|| BRAND NEW!!!
Clayton Company issues 10,000 shares of $10 par value
common stock and pays $20,000 cash to purchase a building.
The market price of the Clayton stock is $35 per share and the
building's book value on the books of the seller is $250,000.
Which of the following is correct based on the above
information?
Total assets increase $350,000
On one hand, the building account increases $370,000 =
$350,000 common stock + $20,000 cash. On the other hand,
the $20,000 of cash used to buy the building decreases the
total amount of assets. Therefore there is a net increase of
$350,000 in assets. Common stock is recorded at its total fair
value of $350,000 = 10,000 shares × $35 per share = $350,000.
,Jimmie Inc. is preparing a statement of stockholders' equity for
2014.
-On January 1, 2014, Jimmie started the year with a $200,000
credit balance in its retained earnings account.
-During 2014, the company earned net income of $140,000.
-Jimmie paid dividends of $80,000.
-Also, the company received cash of $100,000 for additional
shares of common stock issued and then paid $30,000 to
repurchase shares of common stock.
What is the balance in retained earnings on December 31,
2014?
$260,000
Retained earnings on December 31, 2014 = $260,000 =
$200,000 + $140,000 - $80,000. Sales and purchases of
common stock do not affect retained earnings.
Purdue Farms borrowed $10 million by signing a five-year note
on December 31, 2013. Repayments of the principal are
payable annually in installments of $2 million each. Purdue
Farms makes the first payment on December 31, 2014 and then
,prepares its balance sheet. What amount will be reported as
current and long-term liabilities, respectively, in connection
with the note at December 31, 2014, after the first payment is
made?
$2 million in current liabilities and $6 million in long-term
liabilities.
The $2,000,000 payment due on December 31, 2015 is a
current liability and the three later payments in years 2016,
2017, and 2018 are reported as long-term liabilities.
Warren Company sold inventory costing $500 to a customer on
account for $700. The customer took advantage of a sales
discount and paid $686 in cash for the inventory. Which of the
following best describes the impact of the cash collection?
Current assets decrease $14
Cash increases $686 and accounts receivable decreases $700.
Which of the following statements is INCORRECT?
, Ending inventory is greater than beginning inventory when
purchases are less than cost of goods sold.
If purchase of inventories is higher during the year than
inventories used up (cost of goods sold), the ending inventory
level will be higher, not lower, than the beginning inventory
level.
A company provided the following data:
-Sales - $500,000
-Beginning inventory - $40,000
-Ending inventory - $45,000
-Gross profit - $150,000
What was the amount of inventory purchased during the year?
$355,000
Sales - Cost of goods sold = Gross profit. $500,000 - Cost of
goods sold = $150,000. Cost of goods sold = $350,000.
Beginning inventory + Purchases - Ending inventory = Cost of
goods sold. $40,000 + Purchases - $45,000 = $350,000.
Purchases = $355,000.
