CPA Practice Exam - Financial Accounting and Reporting Part 2 |QUESTIONS AND ANSWERS | 2025/2026

CPA Practice Exam - Financial Accounting and Reporting
Part 2




Gains and losses from foreign currency Net Income
transactions are reported in:


Other Comprehensive Income


Net Income

, Derivative Financial Instruments are Hedging Risk
primarily used for _________


Hedging Risk


Reducing Expenses

Which of the following is an example of a Options
derivative?


Stocks


Options


Bonds

Which of the following is a criterion for The Lease term longer than 12 months.
classifying a lease as a finance lease? (1
of 2)


The Lease term longer than 12 months.


The lease does not transfer ownership of
the asset.


All of the above.

Which of the following is a criterion for Either Equals or Exceeds
classifying a lease as a finance lease? The
present value of lease payments ________
substantially all of the asset's fair value. (2
of 2)


Equals


Exceeds


Either Equals or Exceeds


The lessee's initial measurement of a finance The present value of the lease payments.
lease liability is based on:


The present value of the lease payments.


The total cash payments.

Nonprofit organizations report their Both Function and Nature
expenses by __________


Function Only


Nature Only


Both Function and Nature