AICPA CPA Financial Accounting and Reporting (FAR) Free Practice Test
Question 1
Terra Co.'s total revenues from its three operating segments were as follows:
Which operating segment(s) is (are) deemed to be reportable segments?
Which operating segment(s) is (are) deemed to be reportable segments?
Correct Answer: A
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Question 2
What information should a public company present about revenues from its reporting segments?
Correct Answer: A
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Question 3
In the hierarchy of generally accepted accounting principles, APB Opinions have the same authority as
AICPA:
AICPA:
Correct Answer: A
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Question 4
According to the FASB conceptual framework, which of the following statements conforms to the
realization concept?
realization concept?
Correct Answer: D
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Question 5
What is the underlying concept that supports the immediate recognition of a contingent loss?
Correct Answer: D
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Question 6
In September 1996, Koff Co.'s operating plant was destroyed by an earthquake. Earthquakes are rare in
the area in which the plant was located. The portion of the resultant loss not covered by insurance was
$ 700,000. Koff's income tax rate for 1996 was 40%. In its 1996 income statement, what amount should
Koff report as extraordinary loss?
the area in which the plant was located. The portion of the resultant loss not covered by insurance was
$ 700,000. Koff's income tax rate for 1996 was 40%. In its 1996 income statement, what amount should
Koff report as extraordinary loss?
Correct Answer: A
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Question 7
Advertising costs may be accrued or deferred to provide an appropriate expense in each period for:
Correct Answer: D
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Question 8
Coffey Corp.'s trial balance of Income Statement Accounts for the year ended December 31, 1988 as
follows: Coffey's income tax rate is 30%. The gain on debt extinguishment is considered a usual and
recurring part of Coffey's operations. Coffey prepares a multiple-step income statement for 1988.
Income from operations before income tax is:
follows: Coffey's income tax rate is 30%. The gain on debt extinguishment is considered a usual and
recurring part of Coffey's operations. Coffey prepares a multiple-step income statement for 1988.
Income from operations before income tax is:
Correct Answer: B
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