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Admission Test Certified Public Accountant (Financial Accounting & Reporting) Sample Questions:

1. A planned volume variance in the first quarter, which is expected to be absorbed by the end of the fiscal period, ordinarily should be deferred at the end of the first quarter if it is:

A) Option D
B) Option B
C) Option C
D) Option A

2. Is the cumulative effect of an inventory pricing change on prior years earnings reported on the financial statements for

A) Option D
B) Option B
C) Option C
D) Option A

3. The effect of a material transaction that is infrequent in occurrence but not unusual in nature should be presented separately as a component of income from continuing operations when the transaction results in a:

A) Option D
B) Option B
C) Option C
D) Option A

4. APB Opinion No. 28, Interim Financial Reporting, concluded that interim financial reporting should be viewed primarily in which of the following ways?

A) As reporting under a comprehensive basis of accounting other than GAAP.
B) As reporting for an integral part of an annual period.
C) As useful only if activity is spread evenly throughout the year.
D) As if the interim period were an annual accounting period.

5. Chester Corp. was a development stage enterprise from its inception on September 1, 1987 to December 31, 1988. The following information was taken from Chester's accounting records for the above period:

For the period September 1, 1987 to December 31, 1988, what amount should Chester report as net loss?

A) $450,000
B) $ 50,000
C) $350,000
D) $150,000

Solutions: