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Admission Test Certified Public Accountant (Financial Accounting & Reporting) Sample Questions:

1. Which of the following accounting pronouncements is the most authoritative?

A) AICPA Accounting Principles Board Opinion.
B) FASB Technical Bulletin.
C) FASB Statement of Financial Accounting Concepts.
D) AICPA Statement of Position.

2. According to the FASB conceptual framework, comprehensive income includes which of the following?

A) Option C
B) Option B
C) Option A
D) Option D

3. What is the purpose of information presented in notes to the financial statements?

A) To provide recognition of amounts not included in the totals of the financial statements.
B) To correct improper presentation in the financial statements.
C) To provide disclosures required by generally accepted accounting principles.
D) To present management's responses to auditor comments.

4. On January 2, 1991, Air, Inc. agreed to pay its former president $300,000 under a deferred compensation arrangement. Air should have recorded this expense in 1990 but did not do so. Air's reported income tax expense would have been $70,000 lower in 1990 had it properly accrued this deferred compensation in its December 31,1991, financial statements, Air should adjust the beginning balance of its retained earnings by a:

A) $230,000 debit.
B) $300,000 credit.
C) $370,000 debit.
D) $230,000 credit.

5. The effect of a material transaction that is infrequent in occurrence but not unusual in nature should be presented separately as a component of income from continuing operations when the transaction results in a:

A) Option C
B) Option B
C) Option A
D) Option D

Solutions: