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Admission Test Certified Public Accountant (Financial Accounting & Reporting) Sample Questions:
1. In single period statements, which of the following should not be reflected as an adjustment to the opening balance of retained earnings?
A) Effect of a decrease in the estimated useful life of depreciable equipment.
B) Effect of a failure to provide for uncollectible accounts in the previous period.
C) Cumulative effect of a change from LIFO to FIFO in valuing merchandise inventory.
D) Cumulative effect of a change from the percentage of completion to the completed contract method of accounting for long-term construction projects.
2. A statement of cash flows for a development stage enterprise:
A) Shows only cumulative amounts from the enterprise's inception.
B) Is the same as that of an established operating enterprise and, in addition, shows cumulative amounts from the enterprise's inception.
C) Is not presented.
D) Is the same as that of an established operating enterprise, but does not show cumulative amounts from the enterprise's inception.
3. On August 31, 1992, Harvey Co. decided to change from the FIFO periodic inventory system to the weighted average periodic inventory system. Harvey is on a calendar year basis. The cumulative effect of the change is determined:
A) During the eight months ending August 31, 1992, by a weighted average of the purchases.
B) As of January 1, 1992.
C) As of August 31, 1992.
D) During 1992 by a weighted average of the purchases.
4. Reclassification adjustments must be shown in the financial statement that discloses comprehensive income:
A) To show the tax effect of items of comprehensive income.
B) To avoid double counting in comprehensive income items, which are currently displayed in net income.
C) To avoid including transactions with shareholders in items of comprehensive income.
D) To show what portion of comprehensive income is from the realization of current assets.
5. What are the Statements of Financial Accounting Concepts intended to establish?
A) The meaning of "Present fairly in accordance with generally accepted accounting principles."
B) Generally accepted accounting principles in financial reporting by business enterprises.
C) The objectives and concepts for use in developing standards of financial accounting and reporting.
D) The hierarchy of sources of generally accepted accounting principles.
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: C |
By Valerie
