accounting — Investment Banking Practice Questions

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1. A company recognizes $100.0 million in Deferred Revenue on i… — How does this impact the current year's EBITDA
2. A company switching from LIFO to FIFO inventory accounting during a period of rising prices will report which
3. Assuming a 0% tax shield (non-deductible), what is the impact on the year-end Balance Sheet?
4. Which of the following would cause a company to have a Deferred Tax Liability (DTL)?
5. Which item is a non-cash expense that is recorded on the Income Statement but added back on the Cash Flow Stat
6. SaaSCo recognizes 25 million of stock-based compensation (SB… — How does this appear on the cash flow statemen
7. Under modern lease accounting (ASC 842), what is the primary impact of an operating lease on the balance sheet
8. Which of the following describes the impact of a $50 million increase in 'Deferred Revenue' on the three finan
9. Vanguard Corp reports $100M in Net Income. During the period, it recognizes a $100M depreciation expense. If t
10. If a company has a negative Shareholders' Equity balance, which of the following is the most likely cause?
11. On the Cash Flow Statement, how is SBC treated in the Operating section?
12. In February, what is the impact on the Income Statement and the Balance Sheet?
13. Under ASC 842, how does an Operating Lease affect the Income Statement compared to a Finance (Capital) Lease?
14. If the company uses 20 of its cash to pay off 20 of its debt, how do the Three Statements change?
15. If a company uses LIFO (Last-In, First-Out) accounting during a period of rising prices (inflation), how will
16. A company decides to write down its inventory by $50M. Assuming a 25% corporate tax rate, what is the impact o
17. If the tax rate is 40%, what is the Deferred Tax Liability (DTL) created in Year 1?
18. UrbanPack sells 50 backpacks for 120 each in cash. The cost… — At a 40% tax rate, what is the net change in ca
19. If the tax rate is 25%, what is the impact on the financial statements?
20. UrbanPack undergoes an inventory write-down of $50M. If the tax rate is 25%, what is the net impact on the fir
21. If Zenith Logistics purchases $50,000 of equipment using cash, which of the following best describes the immed
22. When an acquirer writes up a target's tangible assets (e.g., PP&E) in a stock-for-stock acquisition, what is c
23. If it uses $50 million in cash to buy $50 million in inventory, what is the impact on the Balance Sheet?
24. Which of the following correctly describes the impact on the financial statements?
25. What is the impact on CFO?
26. An analyst is calculating 'Days Sales Outstanding' (DSO). If Revenue is $1,000M and Accounts Receivable is $10
27. What happens to the three financial statements when a company records $10M in Stock-Based Compensation (SBC)?
28. Which specific line item on the Balance Sheet serves as the primary cumulative link for Net Income from the In
29. What is the combined impact on CFO?
30. How does an increase in depreciation affect EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortiz