FLORIDA CERTIFIED PUBLIC ACCOUNTANT{CPA} EXAMINATION NEWEST
EVALUATED EXAM PRACTICE 100 QUESTIONS 2025-2026|ORIGINAL QUESTIONS
& ANSWERS |DETAILED RATIONALES |HINTED COMPLETE EXAM PREP GRADED
A+*INSTANT DOWNLOAD PDF*
1. A company purchased equipment for $240,000. The equipment has an
estimated residual value of $20,000 and a useful life of 10 years. Using
straight-line depreciation, what is depreciation expense for the first year?
A. $20,000
B. $22,000
C. $24,000
D. $26,000
Answer: B. $22,000
Depreciable cost = $240,000 − $20,000 = $220,000. Annual depreciation =
$220,000 ÷ 10 = $22,000.
2. During an audit, an auditor determines that accounts receivable have a high
risk of material misstatement. Which procedure provides the strongest
evidence regarding the existence of receivables?
A. Reviewing the client's aging schedule
B. Inspecting subsequent cash receipts
C. Obtaining confirmations from customers
D. Comparing receivables with prior-year balances
Answer: C. Obtaining confirmations from customers
External confirmations obtained directly from customers generally provide strong
evidence about the existence and rights related to receivables.
3. A corporation reports pretax financial income of $500,000. Tax depreciation
exceeds book depreciation by $80,000. What amount of taxable income
results?
,A. $420,000
B. $500,000
C. $580,000
D. $600,000
Answer: A. $420,000
Tax depreciation exceeding book depreciation reduces taxable income relative to
pretax financial income by $80,000.
4. Which financial statement assertion is most directly addressed when an
auditor traces recorded sales transactions to shipping documents?
A. Completeness
B. Existence
C. Accuracy
D. Classification
Answer: B. Existence
Tracing recorded sales to shipping documents provides evidence that the recorded
sales actually occurred.
5. A company issues $1,000,000 of bonds at 96. The bonds are issued at:
A. $960,000
B. $964,000
C. $1,040,000
D. $1,096,000
Answer: A. $960,000
Bonds issued at 96 are issued for 96% of face value: $1,000,000 × 96% = $960,000.
6. Which of the following is generally considered a significant deficiency in
internal control?
A. A control deficiency that is inconsequential
B. A deficiency less severe than a material weakness but important enough to
merit attention
,C. Any deficiency resulting in fraud
D. Any deficiency that causes a qualified opinion
Answer: B. A deficiency less severe than a material weakness but important
enough to merit attention
A significant deficiency is less severe than a material weakness but is sufficiently
important to those charged with governance to merit attention.
7. A company uses the allowance method for bad debts. Before adjustment,
Allowance for Credit Losses has a $5,000 credit balance. The required
ending allowance is $18,000. What adjustment should be recorded?
A. Debit bad debt expense $5,000
B. Debit bad debt expense $13,000
C. Debit bad debt expense $18,000
D. Credit bad debt expense $13,000
Answer: B. Debit bad debt expense $13,000
The allowance must increase from $5,000 to $18,000, requiring a $13,000 credit
to the allowance and debit to bad debt expense.
8. Which subsequent event normally requires adjustment of financial
statements?
A. A fire destroying a warehouse after year-end
B. Issuance of bonds after year-end
C. Bankruptcy of a customer confirming a year-end receivable impairment
D. Acquisition of another company after year-end
Answer: C. Bankruptcy of a customer confirming a year-end receivable
impairment
An adjusting subsequent event provides additional evidence about conditions that
existed at the balance-sheet date.
9. A taxpayer has $90,000 of gross income and $20,000 of allowable
deductions. What is taxable income before other adjustments?
, A. $70,000
B. $90,000
C. $110,000
D. $20,000
Answer: A. $70,000
Taxable income is reduced by allowable deductions: $90,000 − $20,000 = $70,000.
10.Which sampling method gives every item in a population a known
probability of selection?
A. Haphazard selection
B. Random selection
C. Block selection
D. Judgmental selection
Answer: B. Random selection
Random selection gives each population item a known probability of being
selected.
11.A company receives $36,000 cash on October 1 for 12 months of services.
What amount should be recognized as revenue by December 31?
A. $3,000
B. $6,000
C. $9,000
D. $36,000
Answer: C. $9,000
Three months of service have been provided: $36,000 × 3/12 = $9,000.
12.Which of the following is the primary responsibility of management
regarding an audit?
A. Expressing an opinion on the financial statements
B. Designing audit procedures
EVALUATED EXAM PRACTICE 100 QUESTIONS 2025-2026|ORIGINAL QUESTIONS
& ANSWERS |DETAILED RATIONALES |HINTED COMPLETE EXAM PREP GRADED
A+*INSTANT DOWNLOAD PDF*
1. A company purchased equipment for $240,000. The equipment has an
estimated residual value of $20,000 and a useful life of 10 years. Using
straight-line depreciation, what is depreciation expense for the first year?
A. $20,000
B. $22,000
C. $24,000
D. $26,000
Answer: B. $22,000
Depreciable cost = $240,000 − $20,000 = $220,000. Annual depreciation =
$220,000 ÷ 10 = $22,000.
2. During an audit, an auditor determines that accounts receivable have a high
risk of material misstatement. Which procedure provides the strongest
evidence regarding the existence of receivables?
A. Reviewing the client's aging schedule
B. Inspecting subsequent cash receipts
C. Obtaining confirmations from customers
D. Comparing receivables with prior-year balances
Answer: C. Obtaining confirmations from customers
External confirmations obtained directly from customers generally provide strong
evidence about the existence and rights related to receivables.
3. A corporation reports pretax financial income of $500,000. Tax depreciation
exceeds book depreciation by $80,000. What amount of taxable income
results?
,A. $420,000
B. $500,000
C. $580,000
D. $600,000
Answer: A. $420,000
Tax depreciation exceeding book depreciation reduces taxable income relative to
pretax financial income by $80,000.
4. Which financial statement assertion is most directly addressed when an
auditor traces recorded sales transactions to shipping documents?
A. Completeness
B. Existence
C. Accuracy
D. Classification
Answer: B. Existence
Tracing recorded sales to shipping documents provides evidence that the recorded
sales actually occurred.
5. A company issues $1,000,000 of bonds at 96. The bonds are issued at:
A. $960,000
B. $964,000
C. $1,040,000
D. $1,096,000
Answer: A. $960,000
Bonds issued at 96 are issued for 96% of face value: $1,000,000 × 96% = $960,000.
6. Which of the following is generally considered a significant deficiency in
internal control?
A. A control deficiency that is inconsequential
B. A deficiency less severe than a material weakness but important enough to
merit attention
,C. Any deficiency resulting in fraud
D. Any deficiency that causes a qualified opinion
Answer: B. A deficiency less severe than a material weakness but important
enough to merit attention
A significant deficiency is less severe than a material weakness but is sufficiently
important to those charged with governance to merit attention.
7. A company uses the allowance method for bad debts. Before adjustment,
Allowance for Credit Losses has a $5,000 credit balance. The required
ending allowance is $18,000. What adjustment should be recorded?
A. Debit bad debt expense $5,000
B. Debit bad debt expense $13,000
C. Debit bad debt expense $18,000
D. Credit bad debt expense $13,000
Answer: B. Debit bad debt expense $13,000
The allowance must increase from $5,000 to $18,000, requiring a $13,000 credit
to the allowance and debit to bad debt expense.
8. Which subsequent event normally requires adjustment of financial
statements?
A. A fire destroying a warehouse after year-end
B. Issuance of bonds after year-end
C. Bankruptcy of a customer confirming a year-end receivable impairment
D. Acquisition of another company after year-end
Answer: C. Bankruptcy of a customer confirming a year-end receivable
impairment
An adjusting subsequent event provides additional evidence about conditions that
existed at the balance-sheet date.
9. A taxpayer has $90,000 of gross income and $20,000 of allowable
deductions. What is taxable income before other adjustments?
, A. $70,000
B. $90,000
C. $110,000
D. $20,000
Answer: A. $70,000
Taxable income is reduced by allowable deductions: $90,000 − $20,000 = $70,000.
10.Which sampling method gives every item in a population a known
probability of selection?
A. Haphazard selection
B. Random selection
C. Block selection
D. Judgmental selection
Answer: B. Random selection
Random selection gives each population item a known probability of being
selected.
11.A company receives $36,000 cash on October 1 for 12 months of services.
What amount should be recognized as revenue by December 31?
A. $3,000
B. $6,000
C. $9,000
D. $36,000
Answer: C. $9,000
Three months of service have been provided: $36,000 × 3/12 = $9,000.
12.Which of the following is the primary responsibility of management
regarding an audit?
A. Expressing an opinion on the financial statements
B. Designing audit procedures
