Free AICPA CPA-Financial Exam Questions

Become AICPA Certified with updated CPA-Financial exam questions and correct answers

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Total 165 Questions | Updated On: Jul 28, 2025

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Question 1

Which of the following should be disclosed in a summary of significant accounting policies?I. Management's intention to maintain or vary the dividend payout ratio.II. Criteria for determining which investments are treated as cash equivalents.III. Composition of the sales order backlog by segment.

A : I only.

B : I and III.

C : II only.

D : II and III.

Answer: C

Question 2

In which of the following situations should a company report a prior-period adjustment?

A : A change in the estimated useful lives of fixed assets purchased in prior years.

B : The correction of a mathematical error in the calculation of prior years' depreciation.

C : A switch from the straight-line to double-declining balance method of depreciation.

D : The scrapping of an asset prior to the end of its expected useful life.

Answer: B

Question 3

In which of the following situations should a company report a prior-period adjustment?

A : A change in the estimated useful lives of fixed assets purchased in prior years.

B : The correction of a mathematical error in the calculation of prior years' depreciation.

C : A switch from the straight-line to double-declining balance method of depreciation.

D : The scrapping of an asset prior to the end of its expected useful life.

Answer: B

Question 4

If a company is not presenting comparative financial statements, the correction of an error in the financial statements of a prior period should be reported, net of applicable income taxes, in the current:

A : Retained earnings statement after net income but before dividends.

B : Retained earnings statement as an adjustment of the opening balance.

C : Income statement after income from continuing operations and before extraordinary items.

D : Income statement after income from continuing operations and after extraordinary items.

Answer: B

Question 5

In April 30, 20X4, Deer Corp. approved a plan to dispose of a component of its business. For the period January 1 through April 30, 20X4, the component had revenues of $500,000 and expenses of $800,000. The assets of the component were sold on October 15, 20X4 at a loss. In its income statement for the year ended December 31, 20X4, how should Deer report the component's operations from January 1 to April 30, 20X4?

A : $500,000 and $800,000 should be included with revenues and expenses, respectively, as part of continuing operations.

B : $300,000 should be reported as part of the loss on disposal of a component and included as part of continuing operations.

C : $300,000 should be reported as an extraordinary loss.

D : $300,000 should be reported as a loss from operations of a component and included in loss from discontinued operations.

Answer: D

Page: 1 / 33

Total 165 Questions | Updated On: Jul 28, 2025

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