CPA FAR EXAM |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
What is the primary accounting and reporting issue arising from accounting changes?
a) The effect of the change on net income.
b) The cost associated with the accounting change.
c) The timelines or reporting of the accounting change.
d) The transition rules applying to the accounting change.
CORRECT ANSWER
d.
Question 2
A cumulative effect of a change in an accounting principle is measured as?
a) the difference between prior periods' net income under the old method and what would
have been reported if the new method had been used in the prior years.
b) the after-tax difference between prior periods' net income under the old method and
what would have been reported if the new method had been used in the prior years.
1
, c) Correct the difference between prior periods' net income and current net income under
the old method and what would have been reported if the new method had been used in
the prior years and the current year.
d) the after-tax difference between prior periods' net income and current net income under
the old method and what would have been reported if the new method had been used in
the prior years and the current year.
CORRECT ANSWER
b.
Question 3
Which of the following items is not a type of accounting change?
a) Change in accounting principles used; for example, a change from LIFO to FIFO.
b) Change in the majority owner of the company.
c) Change in accounting estimate; for example, a change in the useful life or salvage value of
a depreciable asset.
d) Change to consolidated financial statements from individual financial statements.
CORRECT ANSWER
b.
Question 4
When a company changes from any inventory method to LIFO, the change is reported?
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VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
What is the primary accounting and reporting issue arising from accounting changes?
a) The effect of the change on net income.
b) The cost associated with the accounting change.
c) The timelines or reporting of the accounting change.
d) The transition rules applying to the accounting change.
CORRECT ANSWER
d.
Question 2
A cumulative effect of a change in an accounting principle is measured as?
a) the difference between prior periods' net income under the old method and what would
have been reported if the new method had been used in the prior years.
b) the after-tax difference between prior periods' net income under the old method and
what would have been reported if the new method had been used in the prior years.
1
, c) Correct the difference between prior periods' net income and current net income under
the old method and what would have been reported if the new method had been used in
the prior years and the current year.
d) the after-tax difference between prior periods' net income and current net income under
the old method and what would have been reported if the new method had been used in
the prior years and the current year.
CORRECT ANSWER
b.
Question 3
Which of the following items is not a type of accounting change?
a) Change in accounting principles used; for example, a change from LIFO to FIFO.
b) Change in the majority owner of the company.
c) Change in accounting estimate; for example, a change in the useful life or salvage value of
a depreciable asset.
d) Change to consolidated financial statements from individual financial statements.
CORRECT ANSWER
b.
Question 4
When a company changes from any inventory method to LIFO, the change is reported?
2
