FAR CPA Exam, CPA GLEIM
PRACTICE 1 FAR, FAR chapter 1
Framework, Overview and Concepts
MCQ, FAR - 1, FAR REview, FAR -
final review question and answers
10% combined revenue
10% combined profit/loss
10% combined assets - Answer10% Segment Reporting Size Test
75% of revenue from external parties - Answer75% Reporting Sufficiency Test
revenues
- directly traceable costs
- reasonably allocated costs
= operating profit (loss) - AnswerSegment operating profit
60 days- large accelerated
75 days- accelerated
90 days- all other registrants - Answerfiling deadline for the 10-K (filed annually)
40 days- large accelerated and accelerated
45 days- all other registrants - AnswerFiling deadline for the 10-Q (filed quarterly)
requirements for interim and annual financial statements to be filed with the SEC - AnswerWhat is
the Regulation S-X?
annual report of company's employee benefit plans - Answerwhat is the form 11-K?
semiannual report by foreign private issuers - Answerwhat is the form 6-K?
,filed to report major events - Answerwhat is the form 8-K?
statement of cash and equity
statement of cash receipts and disbursements - AnswerCash Basis Financial Statements
statement of assets and liabilities
statement of revenues collected and expenses paid - AnswerModified Cash Basis Financial
Statements
statement of assets and liabilities and equity
statement of income - AnswerIncome tax Basis Financial Statements
cash basis revenue
+ending A/R
-Beginning A/R
- Ending unearned revenue
+Beginning unearned revenue
=Accrual basis revenue - AnswerConverting the cash basis revenue to accrual basis
cash paid for purchases
+ Ending A/P
- Beginning A/P
- Ending inventory
+ Beginning inventory
= Cost of goods sold - AnswerConverting cash paid for purchases to cost of goods sold
cash paid for operating expenses
+ ending accrued liability
- beginning accrued liability
- ending prepaid expenses
+ beginning prepaid expenses
,= accrual basis operating expenses - Answerconverting cash paid for operating expenses to accrual
basis operating expenses
current assets / current liabilities - Answercurrent ratio
cash + short-term marketable securities + receivable (net) / current liabilities - Answerquick ratio
cash + marketable securities / current liabilities - Answercash ratio
sales (net) / average accounts receivable (net) - Answeraccounts receivable turnover ratio
ending accounts receivable (net) / sales (net) / 365 - Answerdays sales in accounts receivable
cost of goods sold / average inventory - Answerinventory turnover ratio
ending inventory / cost of goods sold / 365 - Answerdays in inventory
cost of goods sold / average accounts payable - Answeraccounts payable turnover ratio
ending accounts payable / cost of goods sold / 365 - Answerdays of payables outstanding
days sales in accounts receivable + days in inventory - days of payables outstanding - Answercash
conversion cycle
sales (net) / average total assets - Answerasset turnover ratio
net income / sales (net) - Answerprofit margin
net income / average total assets - Answerreturn on assets (ROA)
Profit margin x asset turnover - Answer"DuPont" Return on Assets
, net income / average total equity - AnswerReturn on equity
income before interest income, interest expense, and taxes / sales (net) - AnswerReturn on sales
sales (net) - cost of goods sold / sales (net) - AnswerGross (profit) margin
cash flow from operations / current liabilities - Answeroperating cash flow ratio
total liabilities / total equity - Answerdebt to equity ratio
total liabilities / total assets - Answertotal debt ratio
total assets / total equity - Answerequity multiplier
income before interest expense and income taxes / interest expense - Answertimes interest earned
income available to common shareholders / weighted average common shares outstanding -
Answerearnings per share
price per share / basic earnings per share - Answerprice earnings ratio
cash dividends / net income - Answerdividend payout ratio
GAAP = assets at fair value, liabilities at present value
IFRS = NBV of assets - Answerformation of a partnership, contributions are recorded as:
no goodwill or bonuses are recorded - Answerexact method for creation of a new partnership
existing partners - when the new partner pays more than NBV
new partner- when the new partner pays less than NBV - Answerbonuses will be credited to the
following partners using the bonus method:
PRACTICE 1 FAR, FAR chapter 1
Framework, Overview and Concepts
MCQ, FAR - 1, FAR REview, FAR -
final review question and answers
10% combined revenue
10% combined profit/loss
10% combined assets - Answer10% Segment Reporting Size Test
75% of revenue from external parties - Answer75% Reporting Sufficiency Test
revenues
- directly traceable costs
- reasonably allocated costs
= operating profit (loss) - AnswerSegment operating profit
60 days- large accelerated
75 days- accelerated
90 days- all other registrants - Answerfiling deadline for the 10-K (filed annually)
40 days- large accelerated and accelerated
45 days- all other registrants - AnswerFiling deadline for the 10-Q (filed quarterly)
requirements for interim and annual financial statements to be filed with the SEC - AnswerWhat is
the Regulation S-X?
annual report of company's employee benefit plans - Answerwhat is the form 11-K?
semiannual report by foreign private issuers - Answerwhat is the form 6-K?
,filed to report major events - Answerwhat is the form 8-K?
statement of cash and equity
statement of cash receipts and disbursements - AnswerCash Basis Financial Statements
statement of assets and liabilities
statement of revenues collected and expenses paid - AnswerModified Cash Basis Financial
Statements
statement of assets and liabilities and equity
statement of income - AnswerIncome tax Basis Financial Statements
cash basis revenue
+ending A/R
-Beginning A/R
- Ending unearned revenue
+Beginning unearned revenue
=Accrual basis revenue - AnswerConverting the cash basis revenue to accrual basis
cash paid for purchases
+ Ending A/P
- Beginning A/P
- Ending inventory
+ Beginning inventory
= Cost of goods sold - AnswerConverting cash paid for purchases to cost of goods sold
cash paid for operating expenses
+ ending accrued liability
- beginning accrued liability
- ending prepaid expenses
+ beginning prepaid expenses
,= accrual basis operating expenses - Answerconverting cash paid for operating expenses to accrual
basis operating expenses
current assets / current liabilities - Answercurrent ratio
cash + short-term marketable securities + receivable (net) / current liabilities - Answerquick ratio
cash + marketable securities / current liabilities - Answercash ratio
sales (net) / average accounts receivable (net) - Answeraccounts receivable turnover ratio
ending accounts receivable (net) / sales (net) / 365 - Answerdays sales in accounts receivable
cost of goods sold / average inventory - Answerinventory turnover ratio
ending inventory / cost of goods sold / 365 - Answerdays in inventory
cost of goods sold / average accounts payable - Answeraccounts payable turnover ratio
ending accounts payable / cost of goods sold / 365 - Answerdays of payables outstanding
days sales in accounts receivable + days in inventory - days of payables outstanding - Answercash
conversion cycle
sales (net) / average total assets - Answerasset turnover ratio
net income / sales (net) - Answerprofit margin
net income / average total assets - Answerreturn on assets (ROA)
Profit margin x asset turnover - Answer"DuPont" Return on Assets
, net income / average total equity - AnswerReturn on equity
income before interest income, interest expense, and taxes / sales (net) - AnswerReturn on sales
sales (net) - cost of goods sold / sales (net) - AnswerGross (profit) margin
cash flow from operations / current liabilities - Answeroperating cash flow ratio
total liabilities / total equity - Answerdebt to equity ratio
total liabilities / total assets - Answertotal debt ratio
total assets / total equity - Answerequity multiplier
income before interest expense and income taxes / interest expense - Answertimes interest earned
income available to common shareholders / weighted average common shares outstanding -
Answerearnings per share
price per share / basic earnings per share - Answerprice earnings ratio
cash dividends / net income - Answerdividend payout ratio
GAAP = assets at fair value, liabilities at present value
IFRS = NBV of assets - Answerformation of a partnership, contributions are recorded as:
no goodwill or bonuses are recorded - Answerexact method for creation of a new partnership
existing partners - when the new partner pays more than NBV
new partner- when the new partner pays less than NBV - Answerbonuses will be credited to the
following partners using the bonus method:
