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AICPA Exam CPA-Financial Topic 1 Question 97 Discussion

Actual exam question for AICPA's CPA-Financial exam
Question #: 97
Topic #: 1
[All CPA-Financial Questions]

Which of the following statements regarding fair value is/are correct?

1. The fair value of an asset or liability is specific to the entity making the fair value measurement.

2. Fair value is the price to acquire an asset or assume a liability.

3. Fair value includes transportation costs, but not transaction costs.

4. The price in the principal market for an asset or liability will be the fair value measurement.

Show Suggested Answer Hide Answer
Suggested Answer: C

Choice 'C' is correct. This affects only the prospective (current and subsequent) periods - not prior periods, not retained earnings.


by Clay at Sep 15, 2024, 08:29 AM

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Brock
1 months ago
I heard the fair value of my answers is about tree fiddy. Not sure if that's correct, but it's the best I can do.
upvoted 0 times
Rebbecca
1 days ago
User 3: So, the fair value is not about tree fiddy then?
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Patti
3 days ago
User 2: I agree, fair value is specific to the entity and it's the price to acquire an asset or assume a liability.
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Lezlie
18 days ago
User 1: I think the correct statements are I & II.
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Cherilyn
1 months ago
Wait, are we supposed to know the difference between fair value and the price to acquire an asset? I thought they were the same thing. This exam is rigged, I tell you!
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Izetta
8 days ago
The price in the principal market for an asset will be the fair value measurement.
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Stevie
15 days ago
Yes, fair value includes transportation costs but not transaction costs.
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Shantell
16 days ago
Fair value is specific to the entity making the measurement, while price to acquire is the actual cost.
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Brigette
1 months ago
Hmm, I'm not sure about this one. I guess I'll just pick the answer that sounds the most like something an accountant would say, which is probably C) II & III.
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Erick
2 months ago
Hold on, are you telling me that transportation costs are included but not transaction costs? That's like saying I can get to the store for free but I have to pay for the items. Sounds like a trick question to me.
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Myong
23 days ago
I agree, fair value is specific to the entity and is the price to acquire an asset or assume a liability.
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Danica
25 days ago
I think the correct statements are I & II.
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Alease
2 months ago
I think the correct answer is B) I & IV. Fair value is specific to the entity, and the price in the principal market is the fair value measurement.
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Lizbeth
2 months ago
I'm not sure about statement III, fair value includes transportation costs but not transaction costs.
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Rosalyn
2 months ago
I agree with Fatima, fair value is specific to the entity and the price to acquire an asset.
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Fatima
2 months ago
I think the correct statements are I & II.
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