ACCOUNTING CRASH COURSE ACTUAL EXAM 2024 NEWEST FROM WALL STREET PREP 160 QUESTIONS WITH DETAILED VERIFIED ANSWERS / WSP ACCOUNTING CRASHCOURSE ACTUAL LATEST EXAM/ WALLSTREET PREP

A customer purchased and received $5,000 of goods on
credit from Discount Paper Supply on September 1. The
customer received the bill on September 13 and mailed a
$5,000 check on September 30. Discount Paper Supply
received the check on October 4. On which of the
following dates should Discount Paper Supply record sales
revenue?
September 13
October 1
September 1
September 30 - ....ANSWER...September 1
Sales revenue should be recorded on the date of sale.
Which of the following best describes the objective of
depreciation?
To report the asset on the balance sheet at the estimated
amount for which the asset could be sold on the balance
sheet date.
To estimate the remaining useful life of the asset.
To allocate the cost of a tangible asset to the periods in
which its use contributes to earning revenue.
To estimate the current market value of the asset. -
....ANSWER...To estimate the remaining useful life of the
asset.
Warren Corporation purchased a truck at a cost of $60,000.
It has an estimated useful life of five years and estimated
residual value of $5,000. At the beginning of year three,
Warren's managers concluded that the total useful life
would be four years, rather than five years. There was no
change in the estimated residual value. What is the amount
of depreciation that Warren should record for year 3 under
the straight-line depreciation method?
$15,500
$16,500
$8,250
$11,000 - ....ANSWER...$8,250
The annual depreciation expense in year 1 and year 2 is
$11,000, calculated as ($60,000 - $5,000) ÷ 5.
As a result of the $11k in annual depreciation, by the end
of year 2/beginning of year 3, you will have depreciated
$22k from the original book value, leaving you with a net
amount of $60k - $22k = $38k at the beginning of year 3.
Now the useful life assumption has changed to 4 years,
meaning there are now only two years left to depreciate the
asset. No change was made to the residual value
assumption, meaning that there is now $38k in book value,
with a residual value remaining at $5k.
That means that $33k ($38k - $5k) is the amount that will
be depreciated over the next two years, and using straightline depreciation that amounts $16.5k per year ($33k / 2
years ).
Therefore, year 3 depreciation expense will be $16.5k (and
so will year 4, for that matter).
During 2014, Clayton Co. reported the following revenues
and expenses:
Revenues:
$10,000
Expenses included:
$1,000 of raw material costs
$3,000 in new equipment purchased at year-end
$1,000 in executive salaries
$2,000 in factory labor
$800 in recurring general legal expenses
$300 in sales commissions
$400 in travel expenses
$200 in office supplies
What is Clayton's gross profit margin? -
....ANSWER...58%
Gross profit = Revenues - COGS = Revenues - Raw
materials - factory labor = $10,000 - $1,000 - $2,000 =
$10,000 - $3,000 = $7,000
Gross profit margin (GPM) = (Revenues -
Expenses)/Revenues = $7,000 / $10,000 = 70%