AICPA Exam CPA-Financial Topic 1 Question 92 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 92
Topic #: 1

[All CPA-Financial Questions]

Which of the following should be disclosed in a summary of significant accounting policies?

ABasis of profit recognition on long-term construction contracts.

BFuture minimum lease payments in the aggregate and for each of the five succeeding fiscal years.

CDepreciation expense.

DComposition of sales by segment.

Show Suggested Answer

Suggested Answer: B

Choice 'B' is correct. If comparative FS are issued, restate prior year's FS. If comparative FS are not issued, restate prior year-end's retained earnings account by 'adjusting' (net of tax) the opening balance of the current retained earnings statement.

by Sheridan at Jul 10, 2024, 12:49 AM

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Lynelle

2 months ago

Hey, at least they didn't ask about the secret formula for Coca-Cola. That's one accounting policy I'd keep under lock and key!

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Bernardo

2 months ago

D? Really? Segment information is interesting, but not as crucial as the other options.

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Ellsworth

10 days ago

D) Composition of sales by segment.

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Margart

12 days ago

C) Depreciation expense.

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Denny

17 days ago

B) Future minimum lease payments in the aggregate and for each of the five succeeding fiscal years.

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Shanice

1 months ago

A) Basis of profit recognition on long-term construction contracts.

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Herminia

2 months ago

I'm going with C. Depreciation expense is a key part of the financial statements.

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Dwight

1 months ago

Which of the following should be disclosed in a summary of significant accounting policies?

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Felice

1 months ago

Which of the following should be disclosed in a summary of significant accounting policies?

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Elsa

1 months ago

Which of the following should be disclosed in a summary of significant accounting policies?

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Ona

3 months ago

B sounds good to me - future minimum lease payments are important information for users to know.

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Sherita

2 months ago

Depreciation expense is also important to disclose, as it impacts the company's financial statements and profitability.

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Clorinda

2 months ago

I think it's important to disclose the basis of profit recognition on long-term construction contracts as well, to give insight into revenue recognition.

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Cecily

2 months ago

I agree, future minimum lease payments are crucial for users to understand the financial obligations of the company.

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Alfreda

3 months ago

The basis of profit recognition on long-term construction contracts seems like the most relevant disclosure here. A is the way to go!

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Kassandra

2 months ago

Composition of sales by segment can provide valuable information to stakeholders.

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Zachary

2 months ago

Depreciation expense is important to include in the summary of significant accounting policies.

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Belen

2 months ago

I think future minimum lease payments should also be disclosed to give a clear picture.

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Ashlyn

3 months ago

I agree, the basis of profit recognition on long-term construction contracts is crucial.

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Lanie

3 months ago

I think D should be disclosed too, to provide transparency on sales composition.

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Leota

3 months ago

I agree with Johana. B should also be disclosed to show future financial obligations.

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Johana

4 months ago

I think A should be disclosed because it affects the recognition of profit.

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