New York Certified Public Accountant
(CPA) Exam With Actual Questions &
Verified Answers,Plus
Rationales/Expert Verified For
Guaranteed Pass Graded A+/2026
/Latest Update/Instant Download Pdf
1. Which financial statement shows a company’s financial position at a
specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
Rationale: The Balance Sheet reports assets, liabilities, and equity at a
specific date, reflecting the company’s financial position.
2. GAAP requires which of the following measurement bases for most
assets?
A. Historical cost
B. Fair value
C. Historical cost with some exceptions for fair value
D. Market value
Rationale: Generally Accepted Accounting Principles (GAAP) primarily use
historical cost, though certain assets are measured at fair value.
3. Which inventory costing method assumes that the earliest goods
purchased are sold first?
A. LIFO
, B. FIFO
C. Weighted Average
D. Specific Identification
Rationale: FIFO (First-In, First-Out) assumes the oldest inventory costs are
assigned to cost of goods sold first.
4. In accrual accounting, revenue is recognized when:
A. Cash is received
B. Earned and realizable
C. The invoice is sent
D. The product is shipped
Rationale: Accrual accounting recognizes revenue when it is earned and
realizable, not necessarily when cash is received.
5. The Sarbanes-Oxley Act primarily addresses:
A. Tax compliance
B. Corporate governance and internal controls
C. Inventory valuation
D. Financial reporting standards
Rationale: SOX was enacted to improve corporate governance, internal
controls, and financial reporting transparency.
6. Which of the following is a temporary account?
A. Accounts Payable
B. Sales Revenue
C. Equipment
D. Retained Earnings
Rationale: Temporary accounts, like revenue and expense accounts, are
closed at the end of each period to retained earnings.
7. What is the effect of recording depreciation expense on the accounting
equation?
A. Increases assets
B. Decreases liabilities
C. Decreases assets and equity
D. Increases equity
, Rationale: Depreciation reduces the book value of assets and decreases
equity through expense recognition.
8. Which type of audit opinion indicates that financial statements are fairly
presented in all material respects?
A. Adverse
B. Disclaimer
C. Unqualified
D. Qualified
Rationale: An unqualified opinion means the auditor believes the financial
statements are free of material misstatement.
9. When bonds are issued at a discount, the interest expense reported on
the income statement:
A. Equals the cash interest paid
B. Exceeds the cash interest paid
C. Is less than the cash interest paid
D. Is unrelated to the cash interest paid
Rationale: Bonds issued at a discount have interest expense greater than the
cash paid because the discount amortization increases total interest expense.
10.Which method of depreciation allocates an asset’s cost based on units of
production?
A. Straight-line
B. Declining balance
C. Units-of-activity
D. Sum-of-the-years’-digits
Rationale: Units-of-activity depreciation allocates cost according to actual
usage or production.
11.Which of the following is a permanent difference for tax purposes?
A. Municipal bond interest
B. Depreciation difference
C. Bad debt expense difference
D. None of the above
(CPA) Exam With Actual Questions &
Verified Answers,Plus
Rationales/Expert Verified For
Guaranteed Pass Graded A+/2026
/Latest Update/Instant Download Pdf
1. Which financial statement shows a company’s financial position at a
specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
Rationale: The Balance Sheet reports assets, liabilities, and equity at a
specific date, reflecting the company’s financial position.
2. GAAP requires which of the following measurement bases for most
assets?
A. Historical cost
B. Fair value
C. Historical cost with some exceptions for fair value
D. Market value
Rationale: Generally Accepted Accounting Principles (GAAP) primarily use
historical cost, though certain assets are measured at fair value.
3. Which inventory costing method assumes that the earliest goods
purchased are sold first?
A. LIFO
, B. FIFO
C. Weighted Average
D. Specific Identification
Rationale: FIFO (First-In, First-Out) assumes the oldest inventory costs are
assigned to cost of goods sold first.
4. In accrual accounting, revenue is recognized when:
A. Cash is received
B. Earned and realizable
C. The invoice is sent
D. The product is shipped
Rationale: Accrual accounting recognizes revenue when it is earned and
realizable, not necessarily when cash is received.
5. The Sarbanes-Oxley Act primarily addresses:
A. Tax compliance
B. Corporate governance and internal controls
C. Inventory valuation
D. Financial reporting standards
Rationale: SOX was enacted to improve corporate governance, internal
controls, and financial reporting transparency.
6. Which of the following is a temporary account?
A. Accounts Payable
B. Sales Revenue
C. Equipment
D. Retained Earnings
Rationale: Temporary accounts, like revenue and expense accounts, are
closed at the end of each period to retained earnings.
7. What is the effect of recording depreciation expense on the accounting
equation?
A. Increases assets
B. Decreases liabilities
C. Decreases assets and equity
D. Increases equity
, Rationale: Depreciation reduces the book value of assets and decreases
equity through expense recognition.
8. Which type of audit opinion indicates that financial statements are fairly
presented in all material respects?
A. Adverse
B. Disclaimer
C. Unqualified
D. Qualified
Rationale: An unqualified opinion means the auditor believes the financial
statements are free of material misstatement.
9. When bonds are issued at a discount, the interest expense reported on
the income statement:
A. Equals the cash interest paid
B. Exceeds the cash interest paid
C. Is less than the cash interest paid
D. Is unrelated to the cash interest paid
Rationale: Bonds issued at a discount have interest expense greater than the
cash paid because the discount amortization increases total interest expense.
10.Which method of depreciation allocates an asset’s cost based on units of
production?
A. Straight-line
B. Declining balance
C. Units-of-activity
D. Sum-of-the-years’-digits
Rationale: Units-of-activity depreciation allocates cost according to actual
usage or production.
11.Which of the following is a permanent difference for tax purposes?
A. Municipal bond interest
B. Depreciation difference
C. Bad debt expense difference
D. None of the above
