【編集済解答付き】Recently Released AICPA Questions 2018

AICPA Released Questions 2018

1. Chris donated securities with a cost of $20,000 and a fair market value of $50,000 to a local civic theater. Chris's tax deduction was limited to $35,000. At what amount should the theater record the securities at the date of donation? a. $0 b. $20,000 c. $35,000 d. $50,000 43067

2. A not-for-profit organization is exempt from reporting which of the following contributed services as revenue? a. A CPA prepares the organization's tax return. b. A special education teacher tutors children with learning disabilities. c. A carpenter builds shelves for the office. d. An attorney solicits contributions on behalf of the organization. 43247

3. A government's police department reports appropriations of $10,000, encumbrances of $2,000, and expenditures of $5,000. What is the amount of available appropriations for the police department? a. $3,000 b. $5,000 c. $7,000 d. $8,000 43781

4. What is a primary purpose and focus of the statement of activities for a nongovernmental, not-for-profit organization? a. To demonstrate the ability of the organization to meet donor-imposed restrictions on resources. b. To demonstrate how the organization's resources are used in providing various programs and services. c. To provide relevant information about the cash receipts and cash payments of the organization during a period. d. To provide a cost-benefit analysis of the use of the organization's resources. 44819

5. Beck Co.'s inventory of trees is as follows:

Beginning Inventory

March 4

purchased

March 12

sold

March 20

purchased

March 27

sold

March 30

purchased

10 trees at $ 50 6 trees at 55 8 trees at 100 8 trees at 60 7 trees at 105 4 trees at 65

What was Beck's cost of goods sold using the last in, first out (LIFO) perpetual method? a. $ 910 b. $ 850 c. $ 808 d. $ 775

45293

6. Charm Co. owns a delivery truck with an original cost of $10,000 and accumulated depreciation of $7,000. Charm acquired a new truck by exchanging the old truck and paying $2,000 in cash. The new truck has a fair value of $5,000 at the time of the exchange. What amount of gain or loss should Charm recognize? a. $0 b. $2,000 gain. c. $2,000 loss. d. $3,000 loss. 45377

7. On March 15, year 2, a calendar-year company issued its year 1 financial statements. On March 1, year 2, a fire destroyed the company's only manufacturing plant. Which of the following statements is correct regarding the treatment of the loss in the December 31, year 1, financial statements? a. The loss should not be recognized or disclosed in the year 1 financial statements. b. The loss should be recognized in the year 1 financial statements. c. The loss should be disclosed and not recognized in the year 1 financial statements. d. Any probable insurance recoveries should be recognized in the year 1 financial statements. 45385

8. During the current year, Casual Wear Co. had total retail sales of $800,000 and collected a 5% state sales tax on all sales. At the end of the prior year, Casual Wear had $4,500 in sales taxes that had not been remitted to the state authorities. During the current year, Casual Wear remitted $39,500 in state sales tax. What amount should be recorded in Casual Wear's current-year financial statements? a. $5,000 in sales tax payable. b. $39,500 in sales tax expense. c. $40,000 in sales tax revenue. d. $840,000 in sales revenue. 45601

9. Which of the following reports would a company file to meet the U.S. Securities and Exchange Commission's requirements for unaudited, interim financial statements reviewed by an independent accountant? a. Form 10-Q. b. Form 10-K. c. 14A Proxy Statement. d. Form S-1. 48811

10. On January 1, year 3, a company changed its inventory costing method from LIFO to FIFO. The company's year 3 financial statements contain comparative information for year 2. How should the company present the year 1 effect of the change in accounting principle in its year 3 comparative financial statements? a. As an adjustment to the beginning year 2 inventory balance with an offsetting adjustment to beginning year 2 retained earnings. b. As part of income from continuing operations in the year 2 income statement. c. As an extraordinary item in the year 2 income statement. d. As a note disclosure only. 49261

11. Each of the following statements is correct regarding the Financial Accounting Standards Board, except: a. It develops principles and attributes that allow organizations to understand the necessary elements to ensure a robust system of internal control. b. It is recognized as authoritative by the United States Securities and Exchange Commission and the American Institute of Certified Public Accountants. c. It establishes accounting concepts and standards for financial accounting and reporting, and provides guidance on implementation of standards. d. It provides a conceptual framework that helps to increase understanding of, and confidence in, financial information on the part of users of financial reports. 50477

12. A company from the United Kingdom uses British pounds in its normal operations, reports in the European Union in euros, and reports in the United States in U.S. dollars. The company is owned by a private equity firm in Japan. What is the company's functional currency? a. The euro. b. The British pound. c. The U.S. dollar. d. The Japanese yen. 50995

13. Which of the following characteristics means that information is reasonably free from error and bias? a. Faithful representation. b. Relevance. c. Consistency. d. Predictive value. 56299

14. At the end of the fiscal year, a state government reported capital assets of $20 million, accumulated depreciation of $5 million, restricted assets of $3 million, and liabilities of $7 million. What amount should the government report as the total net position in its government-wide financial statements? a. $8 million. b. $11 million. c. $15 million. d. $18 million. 74581

15. Lyon Co. estimated its ending inventory using a method based on the financial statements of prior periods in order to prepare its quarterly interim financial statements. What type of inventory system and method

of estimating ending inventory is Lyon using?

Inventory Method of estimating

system a. Perpetual b. Perpetual

ending inventory Retail method Gross profit method

c. Periodic d. Periodic

Sales method Gross profit method

42513

16. Several Bay City employees accepted a voluntary termination plan during year 1. The city will pay a set amount to the terminated employees as follows:

During year 1 End of year 2 End of year 3

$20,000 30,000 15,000

The discounted present value of the payment for year 2 and year 3 is $42,000. What amount of expenditures should be reported in the governmental fund-level financial statements in year 1? a. $20,000 b. $50,000 c. $62,000 d. $65,000

43687

17. Which of the following transactions should be reported as a liability in the general fund financial statements? a. An amount that is due within one year of the balance sheet date. b. An amount to be paid from current financial resources. c. An amount set aside to pay for an unfilled contract. d. Principal on long-term debt due 90 days after the balance sheet date. 43825

18. On January 1, year 1, Eber Co. leased equipment under a four-year capital lease. The present value of minimum lease payments is $348,680. The equipment had a five-year economic life and a $20,000 guaranteed residual value. The equipment reverted to the lessor at the end of the lease. What amount should Eber report as depreciation expense at December 31, year 1? a. $87,170 b. $82,170 c. $69,736 d. $65,736 44587

19. A company completes construction of a $400 million offshore oil platform and places it into service on January 1. State law requires that the platform be dismantled and removed at the end of its useful life, which is estimated to be 10 years. The company estimates that the cost of dismantling the platform will be $20 million. The discounted value of the liability is $9 million using the company's credit-adjusted, risk-free rate. The company has already capitalized the $400 million construction cost of the platform. What a mounts should the company record as liability and expense when the asset is placed into service? a. Liability, $0; expense, $0. b. Liability, $9,000,000; expense, $0. c. Liability, $9,000,000; expense, $9,000,000. d. Liability, $20,000,000; expense, $20,000,000. 46957

20. When valuing certain financial instruments, a company that has elected the fair value measurement option must apply the accounting measurement based on which of the following criteria? a. A portion of an asset or liability. b. Instrument-by-instrument basis. c. Type-by-type basis. d. At the entity level. 47217

22. The definition of a smaller reporting company with respect to market value, as established by the U.S. Securities and Exchange Commission, includes companies with less than exactly what amount in public equity float? a. $75 million b. $100 million c. $125 million d. $150 million 49335

23. Each of the following transact ions will cause a decrease in stockholders' equity, except a. The sale of treasury stock at less than cost. b. The declaration of a cash dividend. c. A loss on the sale of a discontinued segment. d. A loss from a foreign currency translation adjustment.

24. How are amendments incorporated into the FASB Accounting Standards Codification? a. By issuing an exposure draft. b. By releasing an accounting standards update. c. By producing a discussion paper. d. By publishing a statement of financial accounting standards.

50767 50999

25. A corporation issued debt to purchase 10 acres of land for development purposes. Expenditures related to this purchase are as follows:

Description Purchase price Real estate taxes in arrears Debt issuance costs Attorney fee - title search on land

Amount $1,000,000

15,000 2,000 5,000

The company should record its acquisition of the land in its financial statements at a value of a. $1,000,000 b. $1,015,000 c. $1,020,000 d. $1,022,000

51303

26. Parent Co. owns 90% of the 10,000 outstanding shares of Subsidiary Co.'s common stock on December 31, year 1. On that date, the stockholders' equity of Subsidiary was $150,000, consisting of $100,000 of no-par common stock and $50,000 of retained earnings. On January 2, year 2, Subsidiary issued 2,000 previously unissued shares for $24,000 to various outside investors. As a consequence of this transaction, Parent's ownership share was reduced to 75%. Which of the following correctly reports this transaction? a. Parent's investment in Subsidiary is reduced by $4,500. b. Parent's investment in Subsidiary is increased by $3,000. c. The consolidated income statement reports a loss of $7,500. d. The consolidated income statement reports a gain of $4,000. 75389

27. For a public business entity, the goodwill impairment test is required to be performed a. Only at the end of the fiscal year. b. Only at the beginning of the fiscal year. c. Any time during the last quarter of the fiscal year. d. Any time during the fiscal year, provided that it is performed at the same time every year.

80442

1. d 9. a 17. b 25. c

2. d 10. a 18. a 26. a

3. a 11. a 19. b 27. d

Solutions

4. b 12. b 20. b

5. b 13. a 21. c

6. a 14. b 22. a

7. c 15. d 23. a

8. a 16. a 24. b

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