CPA Exam FAR (2024 AICPA Newly Released MCQs) –
Q&A
A nongovernmental not-for-profit organization may report on which of the following basis and remain in compliance with generally accepted accounting principles (GAAP)?
A) Cash.
B) Accrual.
C) Modified cash.
D) Modified accrual. Correct Ans - B) Accrual.
LLA, Inc. was capitalized through the issuance of 10,000 shares of $30 par common stock that was sold at $50 per share. LLA had net income as follows:
Year 1 $100,000
Year 2 $200,000
If, during year 2, LLA paid dividends to its shareholders at $25 per share, what amount was LLA's retained earning balance and shareholders' equity balance at the end of year 2? Retained Earnings Shareholder's Equity
A) $50,000 $550,000
B) $50,000 $800,000
C) $300,000 $550,000
D) $300,000 $800,000 Correct Ans - Retained Earnings Shareholder's Equity
A) $50,000 $550,000
A statement of activities prepared by a nongovernmental not-for-profit organization is most similar to which of the following financial statements prepared b ya for-profit entity?
A) Income Statement.
B) Balance Sheet.
C) Statement of cash flows.
D) Statement of changes in stockholder's equity. Correct Ans - A) Income Statement. Alpha Co. has $100 billion in assets, $100 billion in revenues, and $10 billion in profits for the current year. There are four operating segments that report directly to the chief operating officer. Which of the following segments is required to present key disclosures?
Segment Assets Revenues Profits 1 $40 $70 $10.5 2 $30 $16 $0.5 3 $21 $9 $(1.5) 4 $9 $5 $0.5
A) Segment 1
B) Segments 1 & 2
C) Segments 1, 2, & 3
D) Segments 1, 2, 3, & 4 Correct Ans - C) Segments 1, 2, & 3
A company reports on the cash basis. During the company's first year of business, it had sales on account of $1,000,000, inventory purchases on account of $400,000, and other expenses of $200,000. At the end of the year, the company had accounts receivable, inventory, and inventory related accounts payable of $100,000, $10,000., and $50,000 respectively. What is the company's cash-basis income for its first year of operations?
A) $300,000
B) $350,000
C) $400,000
D) $450,000 Correct Ans - B) $350,000
A company uses a periodic inventory system and has its cost of ending inventor understated by $4,000. Which of the following describes the effects of this error on the company's current-year's costs of goods sold and net income, respectively? Cost of goods sold Net income
A) Understated Understated
B) Understated Overstated
C) Overstated Understated
Q&A
A nongovernmental not-for-profit organization may report on which of the following basis and remain in compliance with generally accepted accounting principles (GAAP)?
A) Cash.
B) Accrual.
C) Modified cash.
D) Modified accrual. Correct Ans - B) Accrual.
LLA, Inc. was capitalized through the issuance of 10,000 shares of $30 par common stock that was sold at $50 per share. LLA had net income as follows:
Year 1 $100,000
Year 2 $200,000
If, during year 2, LLA paid dividends to its shareholders at $25 per share, what amount was LLA's retained earning balance and shareholders' equity balance at the end of year 2? Retained Earnings Shareholder's Equity
A) $50,000 $550,000
B) $50,000 $800,000
C) $300,000 $550,000
D) $300,000 $800,000 Correct Ans - Retained Earnings Shareholder's Equity
A) $50,000 $550,000
A statement of activities prepared by a nongovernmental not-for-profit organization is most similar to which of the following financial statements prepared b ya for-profit entity?
A) Income Statement.
B) Balance Sheet.
C) Statement of cash flows.
D) Statement of changes in stockholder's equity. Correct Ans - A) Income Statement. Alpha Co. has $100 billion in assets, $100 billion in revenues, and $10 billion in profits for the current year. There are four operating segments that report directly to the chief operating officer. Which of the following segments is required to present key disclosures?
Segment Assets Revenues Profits 1 $40 $70 $10.5 2 $30 $16 $0.5 3 $21 $9 $(1.5) 4 $9 $5 $0.5
A) Segment 1
B) Segments 1 & 2
C) Segments 1, 2, & 3
D) Segments 1, 2, 3, & 4 Correct Ans - C) Segments 1, 2, & 3
A company reports on the cash basis. During the company's first year of business, it had sales on account of $1,000,000, inventory purchases on account of $400,000, and other expenses of $200,000. At the end of the year, the company had accounts receivable, inventory, and inventory related accounts payable of $100,000, $10,000., and $50,000 respectively. What is the company's cash-basis income for its first year of operations?
A) $300,000
B) $350,000
C) $400,000
D) $450,000 Correct Ans - B) $350,000
A company uses a periodic inventory system and has its cost of ending inventor understated by $4,000. Which of the following describes the effects of this error on the company's current-year's costs of goods sold and net income, respectively? Cost of goods sold Net income
A) Understated Understated
B) Understated Overstated
C) Overstated Understated
