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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Financial Reporting | 30-40% | - Special Purpose Frameworks - General Purpose Financial Statements - Financial Reporting for Nonprofits - Conceptual Framework and Standard-Setting - State and Local Government Reporting |
| Topic 2: Select Financial Statement Accounts | 30-40% | - Assets - Liabilities - Expenses and Other Items - Revenue Recognition - Equity |
| Topic 3: Select Transactions | 25-35% | - Leases - Derivatives and Hedge Accounting - Subsequent Events and Fair Value Disclosures - Business Combinations and Consolidations - Fair Value Measurements |
Conceptually, interim financial statements can be described as emphasizing:
Correct Answer: D 🗳️
The following question is based on the following:
Vane Co.'s trial balance of income statement accounts for the year ended December 31, 2002, included the following:
Vane's income tax rate is 30%.
In Vane's 2002 multiple-step income statement, what amount should Vane report as income from continuing operations?
Correct Answer: B 🗳️
On January 2, 1993, Quo, Inc. hired Reed to be its controller. During the year, Reed, working closely with Quo's president and outside accountants, made changes in accounting policies, corrected several errors dating from 1992 and before, and instituted new accounting policies.
Quo's 1993 financial statements will be presented in comparative form with its 1992 financial statements.
This question represents one of Quo's transactions. List B represents the general accounting treatment required for these transactions. These treatments are:
* Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the accounting change or error correction in the 1993 financial statements, and do not restate the 1992 financial statements.
* Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust 1992 beginning retained earnings if the error or change affects a period prior to 1992.
* Prospective approach - Report 1993 and future financial statements on the new basis but do not restate 1992 financial statements.
Item to Be Answered
During 1993, Quo determined that an insurance premium paid and entirely expensed in 1992 was for the period January 1, 1992, through January 1, 1994.
List B (Select one)
Correct Answer: C 🗳️
Which of the following is true regarding the presentation of "comprehensive income."
Correct Answer: A 🗳️
During 20X5, Dale Corp. made the following accounting changes:
What amount should be shown in the 20X5 retained earnings statement as an adjustment to the beginning balance?
Correct Answer: C 🗳️
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