CPA Exam Practice Questions and
answers
What is the conceptual framework intended to establish? - AnswerThe objectives and concepts for
use in developing standards of financial accounting and reporting.
According to the conceptual framework, the objectives of financial reporting for business enterprises
are based on: - AnswerThe needs of the users of the information.
According to the FASB conceptual framework, which of the following is not an enhancing qualitative
characteristic? - AnswerConfirmatory value.
Under Statement of Financial Accounting Concepts (SFAC) 8, predictive value is an ingredient of the
fundamental quality of - AnswerRelevance.
Under Statement of Financial Accounting Concepts (SFAC) 8, which of the following relates to both
relevance and faithful representation? - AnswerTimeliness.
According to the FASB Conceptual Framework, which of the following relates to both relevance and
faithful representation? - AnswerConsistency & Verifiability.
According to the FASB Conceptual Framework, what does the concept of faithful representation in
financial reporting include? - AnswerNeutrality.
Under Statements of Financial Accounting Concepts, comprehensive income includes which of the
following? - AnswerGains & Gross Margin.
According to the conceptual framework, the process of reporting an item in the financial statements
of an entity is: - AnswerRecognition.
Which of the following is an example of the expense recognition principle of associating cause and
effect? - AnswerSales commissions.
Ande Co. estimates uncollectible accounts expense using the ratio of past actual losses from
uncollectible accounts to past net credit sales, adjusted for anticipated conditions. The practice
follows the accounting concept of: - AnswerMatching.
answers
What is the conceptual framework intended to establish? - AnswerThe objectives and concepts for
use in developing standards of financial accounting and reporting.
According to the conceptual framework, the objectives of financial reporting for business enterprises
are based on: - AnswerThe needs of the users of the information.
According to the FASB conceptual framework, which of the following is not an enhancing qualitative
characteristic? - AnswerConfirmatory value.
Under Statement of Financial Accounting Concepts (SFAC) 8, predictive value is an ingredient of the
fundamental quality of - AnswerRelevance.
Under Statement of Financial Accounting Concepts (SFAC) 8, which of the following relates to both
relevance and faithful representation? - AnswerTimeliness.
According to the FASB Conceptual Framework, which of the following relates to both relevance and
faithful representation? - AnswerConsistency & Verifiability.
According to the FASB Conceptual Framework, what does the concept of faithful representation in
financial reporting include? - AnswerNeutrality.
Under Statements of Financial Accounting Concepts, comprehensive income includes which of the
following? - AnswerGains & Gross Margin.
According to the conceptual framework, the process of reporting an item in the financial statements
of an entity is: - AnswerRecognition.
Which of the following is an example of the expense recognition principle of associating cause and
effect? - AnswerSales commissions.
Ande Co. estimates uncollectible accounts expense using the ratio of past actual losses from
uncollectible accounts to past net credit sales, adjusted for anticipated conditions. The practice
follows the accounting concept of: - AnswerMatching.
