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Uniform CPA Examination Questions and unofficial Answers, copyright by American Institute of Certified Public
Accountants, Inc. All rights reserved. Reprinted by Roger CPA Review with permission.
$50,000
Accounts receivable
20,000
5,000
3,000
Merchandise inventory
7,000
Unearned rent
1,000
2,000
What amount should Clear report as total current assets in its balance sheet?
A.
B.
C.
D.
$64,000
$67,000
$72,000
$74,000
Attribute
Item ID
Area
Group
Topic
Key
Value
45939
001
003
001
A
$20,000
10,000
50,000
40,000
30,000
What amount should Martin report as net cash provided by operating activities in its statement
of cash flows for the year?
A.
B.
C.
D.
$0
$ 40,000
$ 50,000
$100,000
Attribute
Item ID
Area
Group
Topic
Key
Value
42987
001
003
005
B
Basis of consolidation.
Concentration of credit risk of financial instruments.
Composition of plant assets.
Adequacy of pension plan assets in relation to vested benefits.
Attribute
Item ID
Area
Group
Topic
Key
Value
40643
001
003
006
A
Attribute
Item ID
Area
Group
Topic
Key
Value
51161
001
004
000
D
Garcel, Inc. held unfinished inventory at a cost of $85,000 with a sales value of $125,000. The
inventory will cost $10,500 to complete. The normal profit margin is 30% of sales. The
replacement cost of the inventory was $75,000. What amount should Garcel report as inventory
on balance sheet?
A.
B.
C.
D.
$114,500
$ 85,000
$ 77,000
$ 75,000
Attribute
Item ID
Area
Group
Topic
Key
Value
44561
002
003
000
C
$1,000,000
1,000,000
Sea has an 8%, three-year construction loan of $3,000,000. What is the amount of interest
costs that Sea may capitalize during the current year?
A.
B.
C.
D.
$0
$ 80,000
$160,000
$240,000
Attribute
Item ID
Area
Group
Topic
Key
Value
52983
002
004
000
B
Under IFRS, which of the following statements about intangible assets is correct?
A. Internally generated goodwill cannot be recognized as an asset.
B. Intangible assets within a class may be measured differently using either the cost model
or the revaluation model.
C. Research and development costs are capitalized as incurred.
D. Intangible assets with indefinite lives must be amortized annually.
Attribute
Item ID
Area
Group
Topic
Key
Value
53823
002
006
000
A
Attribute
Item ID
Area
Group
Topic
Key
Value
50025
002
009
001
D
Which of the following statements is correct regarding valuation allowances in accounting for
income taxes?
A. The effect of a change in the opening balance of a valuation allowance that results from
a change of circumstances ordinarily is included in income from operations.
B. Both deferred tax assets and deferred tax liabilities can be reduced by a valuation
allowance.
C. Only negative evidence, not positive evidence, should be considered when determining
whether a valuation allowance is needed.
D. A valuation allowance is necessary when the realistic probability standard of evidence is
satisfied.
Attribute
Item ID
Area
Group
Topic
Key
Value
47985
002
014
000
A
$ 30,000
$ 50,000
$ 90,000
$110,000
Attribute
Item ID
Area
Group
Topic
Key
Value
49785
002
009
004
D
On day 1, Clothes Co., sells clothing to Link Corp. for $40,000. Clothes ships the clothing on
day 1 and Link is obligated to pay Clothes within six months. Link is given 12 months to return
any of the clothing for a refund if they experience low demand. Link is also given 18 months to
exchange any clothing due to low demand. At the time of sale, Clothes cannot reasonably
estimate returns, but estimates $5,000 in exchanged goods. Clothes should recognize revenue
for the aforementioned transaction
A.
B.
C.
D.
Attribute
Item ID
Area
Group
Topic
Key
Value
48943
002
011
000
C
A $450,000 debit.
A $500,000 debit.
A $550,000 credit.
A $450,000 credit.
Attribute
Item ID
Area
Group
Topic
Key
Value
48105
002
013
004
A
A company recorded a decommissioning liability and recognized the amount recorded as part of
the cost of the related property. After the property was fully depreciated, the decommissioning
liability was reviewed and adjusted. How should this change in the decommissioning liability be
recognized under IFRS?
A. The change in the liability is recognized in other comprehensive income.
B. The change in the liability is recognized in profit or loss.
C. The change in the liability is recognized as a change in the carrying amount of the
property if the liability increases but is otherwise recognized in profit or loss.
D. The change in the decommissioning liability is not recognized until it is settled.
Attribute
Item ID
Area
Group
Topic
Key
Value
53561
003
002
000
B
$30,000
25,000
Legal fees
10,000
1,000
$ 1,000
$11,000
$36,000
$66,000
Attribute
Item ID
Area
Group
Topic
Key
Value
56149
003
003
000
B
Based on the stock transactions below, what is the weighted average number of shares
outstanding as of December 31, year 1, that should be used in the calculation of basic earnings
per share in financial statements issued on March 1, year 2?
Date
Transactions
January 1, year 1
Beginning balance 100,000
April 1, year 1
Issued 30,000 shares for cash
June 1, year 1
50% stock dividend
February 15, year 2
2 for 1 stock split
March 15, year 2
Issued 40,000 shares for cash
A.
B.
C.
D.
147,500
183,750
295,000
367,500
Attribute
Item ID
Area
Group
Topic
Key
8
Value
43903
003
006
000
D
Inputs for the asset or liability based on the reporting entity's internal data.
Quoted prices for similar assets or liabilities in active markets.
Inputs that are principally derived from or corroborated by observable market data.
Unadjusted quoted prices for identical assets or liabilities in active markets.
Attribute
Item ID
Area
Group
Topic
Key
Value
48237
003
009
000
D
On June 1, year 1, ABC Co. issued a 200,000 euro purchase order for equipment to be supplied
by a German company. ABC's functional currency is the U.S. dollar. The equipment was
delivered to ABC on November 1, year 1, and ABC recorded a payable due to the German
company. ABC paid for the equipment on January 31, year 2. The following are the exchange
rates in effect:
June 1, year 1
November 1, year 1
Under IFRS, what is the foreign currency gain or loss that ABC should record for the year ended
December 31, year 1?
A. A loss of $30,000.
B. A loss of $20,000.
C. A gain of $10,000.
D. A gain of $30,000.
Attribute
Item ID
Area
Group
Topic
Key
Value
53439
003
011
000
D
Value
48111
003
014
000
B
Isle Co. owned a copy machine that cost $5,000 and had accumulated depreciation of $2,000.
Isle exchanged the copy machine for a computer that cost $4,000. Isle's future cash flows are
not expected to change significantly as a result of the exchange. What amount of gain or loss
should Isle report and at what amount should it record the asset?
A.
B.
C.
D.
No gain or loss in the income statement; $3,000 asset in the balance sheet.
No gain or loss in the income statement; $4,000 asset in the balance sheet.
$1,000 gain in the income statement; $3,000 asset in the balance sheet.
$1,000 gain in the income statement; $4,000 asset in the balance sheet.
Attribute
Item ID
Area
Group
Topic
Key
10
Value
46375
003
016
000
A
$18,400
$20,000
$37,000
$45,000
Attribute
Item ID
Area
Group
Topic
Key
Value
49919
003
021
000
D
Which of the following is a required part of a local government's management's discussion and
analysis (MD&A) as part of its financial statements?
A. The MD&A should be presented with other required supplementary information.
B. The MD&A should compare current-year results to the prior year with emphasis on the
current year.
C. The MD&A should include an analysis for each fund.
D. The MD&A should present condensed financial information from the fund financial
statements.
Attribute
Item ID
Area
Group
Topic
Key
11
Value
43203
004
002
006
B
$ 9,000
$12,000
$21,000
$28,000
Attribute
Item ID
Area
Group
Topic
Key
Value
55843
004
002
001
B
Land and other real estate held as investments by endowments in a government's permanent
fund should be reported at
A.
B.
C.
D.
Historical cost.
The lower of cost and net realizable value.
Fair value.
Fair value less costs of disposal.
Attribute
Item ID
Area
Group
Topic
Key
12
Value
44569
004
002
002
C
Current.
Long-term.
Permanently restricted.
Temporarily unrestricted.
Attribute
Item ID
Area
Group
Topic
Key
Value
53081
005
001
001
C
A nongovernmental not-for-profit college has a portfolio of bond investments that had an original
cost of $2,000,000. The college's board of trustees voted to hold the principal of this fund intact
in perpetuity and designated the earnings to reimburse faculty for travel to academic
conferences. During the year, interest of $50,000 was earned in cash. The fair value of the
bonds was $1,980,000. What amount should the college report as permanently restricted net
assets at year end?
A.
B.
C.
D.
$0
$1,980,000
$2,000,000
$2,030,000
Attribute
Item ID
Area
Group
Topic
Key
13
Value
43899
005
002
002
A
Value
51371
001
001
002
A
Attribute
Item ID
Area
Group
Topic
Key
14
Value
43975
001
003
003
B
$120,000
Purchase of equipment
80,000
60,000
70,000
150,000
What amount should Dunbarn report as cash provided (used) by investing activities in its statement of
cash flows for the year?
A.
B.
C.
D.
$(120,000)
$(140,000)
$(210,000)
$ 150,000
Attribute
Item ID
Area
Group
Topic
Key
Value
42973
001
003
005
B
Savor Co. had $100,000 in accrual basis pretax income for the year. At year end, accounts receivable
had increased by $10,000 and accounts payable had decreased by $6,000 from their prior year-end
balances. Under the cash basis of accounting, what amount of pretax income should Savor report for the
year?
A.
B.
C.
D.
$ 84,000
$ 96,000
$104,000
$116,000
Attribute
Item ID
Area
Group
Topic
Key
15
Value
41063
001
006
000
A
Value
44861
002
003
000
A
Quick Co. acquired the following assets from a liquidating competitor for a $200,000 lump-sum purchase
price:
Inventory
Land
Building
Competitors carrying
amount
Fair value
$ 70,000
40,000
110,000
$ 50,000
50,000
150,000
$220,000
$250,000
$100,000
$120,000
$150,000
$200,000
Attribute
Item ID
Area
Group
Topic
Key
16
Value
43583
002
004
000
B
Attribute
Item ID
Area
Group
Topic
Key
Value
49911
002
005
002
D
Anchor Co. is experiencing financial difficulties. Anchor negotiated a settlement of $100,000 in debt owed
to Bowden, Inc. in exchange for Anchor's gross receivables of $100,000. The receivables have an
allowance for uncollectible accounts of $25,000. The impact of this transaction on Anchor's net income is
a $25,000
A.
B.
C.
D.
Attribute
Item ID
Area
Group
Topic
Key
17
Value
49903
002
009
005
B
March 9
April 15
May 19
December 31
Attribute
Item ID
Area
Group
Topic
Key
Value
52755
002
010
000
A
In February, Colt Corp. sold merchandise to Sink Co. for $10,000. Colt is using the cost recovery method
to account for this sale, which had cost of goods sold of $2,500. Colt received the following payments
from Sink during the year:
Date
June
Amount
$1,000
August
1,500
October
200
December
700
$3,400
What amounts of gross profit should Colt recognize in its June 30 and December 31 income statements?
A.
B.
C.
D.
Attribute
Item ID
Area
Group
Topic
Key
18
June 30
$0
$0
$1,000
$1,000
December 31
$0
$900
$2,400
$3,400
Value
41369
002
011
000
B
Attribute
Item ID
Area
Group
Topic
Key
Value
47229
002
013
004
A
Which of the following circumstances would result in a deferred tax asset for the current year?
A.
B.
C.
D.
Expenses that are recognized in financial income this year and deductible next year.
Expenses that are deductible this year and recognized in financial income next year.
Revenues that are recognized in financial income this year and taxable next year.
Revenues that are recognized in financial income this year but are not subject to taxation.
Attribute
Item ID
Area
Group
Topic
Key
19
Value
45531
002
014
000
A
Value
55473
003
001
000
B
The per-share amount must be reported on the face of a public company's income statement for which of
the following items?
A.
B.
C.
D.
Attribute
Item ID
Area
Group
Topic
Key
20
Value
43957
003
006
000
A
Attribute
Item ID
Area
Group
Topic
Key
Value
41599
003
011
000
B
Which of the following is a criterion for classifying a lease as a capital lease by a lessee?
A. The lease term is equal to 75% or more of the estimated economic life of the leased property.
B. The present value of the minimum lease payments is 75% or more of the fair value of the leased
property.
C. The lease agreement contains an option to purchase the leased property at its fair value at the
end of the lease term.
D. The lease agreement requires that title of the leased property remains with the lessor at the end
of the lease term.
Attribute
Item ID
Area
Group
Topic
Key
21
Value
52381
003
014
000
A
$1,000
$4,000
$5,000
$6,000
Attribute
Item ID
Area
Group
Topic
Key
Value
45375
003
016
000
C
The following information relates to two projects performed by Miley Co. during the year for laboratory
research aimed at discovering new knowledge:
Likelihood that effort will result in
Project Costs
future benefits
I. $100,000
Probable
II. $ 50,000
Reasonably possible
What should Miley report as research and development expenses in its income statement for the year?
A. $0
B. $ 50,000
C. $100,000
D. $150,000
Attribute
Item ID
Area
Group
Topic
Key
22
Value
42069
003
018
000
D
$275,000
$750,000
$1,300,000
$2,050,000
Attribute
Item ID
Area
Group
Topic
Key
Value
49667
003
021
000
B
Cash.
Modified cash.
Modified accrual.
Accrual.
Attribute
Item ID
Area
Group
Topic
Key
23
Value
41249
004
001
001
D
Governmental activities.
Business-type activities.
Fiduciary activities.
Component units.
Attribute
Item ID
Area
Group
Topic
Key
Value
55745
004
002
001
C
Which of the following funds of a local government would report transfers to other funds as an other
financing use?
A.
B.
C.
D.
Enterprise.
Internal service.
Pension trust.
General.
Attribute
Item ID
Area
Group
Topic
Key
24
Value
42315
004
004
005
D
Attribute
Item ID
Area
Group
Topic
Key
Value
43041
005
002
001
A
A donor gives $10,000 to a nongovernmental, not-for-profit organization with instructions that it must be
used to fund the organizations general operating expenses during the following fiscal year. The donation
will increase the organization's
A.
B.
C.
D.
Attribute
Item ID
Area
Group
Topic
Key
25
Value
44095
005
002
002
B
$100,000
250,000
100,000
50,000
In order to properly reflect receipt of the donations, net assets should increase in the amount of
A.
B.
C.
D.
Attribute
Item ID
Area
Group
Topic
Key
26
Value
44541
005
002
003
C
27
28
Task 5017_01
29
30
31