Exam (elaborations)

CPA Exam 2025: Comprehensive Certified Public Accountant Study Guide with Practice Questions & 100% Correct Answers

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Course
American Institute of Certified Public Accountants

Institution
American Institute Of Certified Public Accountants

Pass Your CPA Exam 2025 with Confidence! Are you preparing for the Certified Public Accountant (CPA) Exam? This comprehensive study guide is packed with 100% correct answers, real exam-style practice questions, and expert explanations to help you pass on your first attempt! What’s Inside?...

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Uploaded on March 11, 2025
Number of pages 11
Written in 2024/2025
Type Exam (elaborations)
Contains Questions & answers

cpa board exam questions correct answers
cost accounting financial reporting review
cpa certification exam study guide
financial accounting auditing practice questions

Institution American Institute of Certified Public Accountants
Course American Institute of Certified Public Accountants

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CPA EXAM 2025

Acquisition Cost

- answers-Includes all costs incurred in getting the merchandise to an entity's location and ready
for use

Acquisition cost

- answers-The acquisition cost of PP&E includes both the cash equibalent price and all costs
incurred to get the asset on location and ready for use.

Acquisition Cost - Developed Internally

- answers-Internally developed intangible assets are likely the result of research and development
activities which are expensed in the period incurred. Therefore, the capitalized cost of an
internally developed intangible asset usually is composed of the legal and other related
registration costs.

Assigning Accounts Receivable

- answers-- Assignment of A/R normally is done with recourse
- Assignment usually is done without notification to customers

Available-for-sale Securities

- answers-- Debt or Equity securities not classified as either HTM or Trading
- Debt is classified on BS by maturity date
- Equity securities are classified by mgt's intent
- Carried on BS at aggregate FMV
- Unreal G/L go directly to SH equity (other comprehensive income)

Bad Debts - Allowance Method

- answers-Income Statement Approach
Balance Sheet Approach

, Bad Debts - Direct Write-Off Method

- answers-- No entry for bad debts until customer actually defaults.
- At default, the cutomer's account is written off.
- Theoretically weak, matching issue
- Only allowed if bad debt expense is immaterial

Balance Sheet Approach

- answers-- Estimate of bad debt expense is based on the balance sheet
- Period sales have no bearing on the amount of adjustment

Balance sheet reporting:

- answers-Accounts Receivable
Less: Allowance for bad debts
= Net realizable value of A/R

Capitalized Interest =

- answers-Average Accumulated Expenditures
x Interest Rate

Cash

- answers-Money that is FREE and CLEAR and available to be spend in current operations.

Cash-Flow Hedge

- answers-Protects against potential loss from an asset's or liability's future cash flow
- Record on BS as asset or liability
- Unreal G/L depend on whether hedge is effective
- Effective cash flow hedges counterbalance losses elsewhere
- Ineffective cash flow hedges are reported on the IS

Categories of PPE

- answers-- Plant & Equipment
- Land
- Natural Resources

Ceiling Value

- answers-Net realizable value - reduce the sales price by the estimated cost to complete and sell
the inventory

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