Discuss AICPA CPA-Financial Exam Topic 2 Question 38

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

i. Management's intention to maintain or vary the dividend payout ratio.

ii. Criteria for determining which investments are treated as cash equivalents.

iii. Composition of the sales order backlog by segment.

AI only.

BI and III.

CII only.

DII and III.

Suggested Answer: C

Choice 'c' is correct. Il only.

The criteria for determining which investments are treated as 'cash equivalents' is a method of accounting policies that needs to be disclosed in the summary of significant accounting policies.

Choice 'a' is incorrect. Management's intention to maintain or vary the 'dividend payout ratio' is not an 'accounting policy.'

Choices 'b' and 'd' are incorrect. Composition of the sales order backlog by segment is not an 'accounting policy.'

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9 comments · newest first

Ilene 11 months ago

I agree, II is crucial, but I feel like III is a stretch.

Elvera 12 months ago

Wait, why would management's dividend plans matter here?

Bernardo 12 months ago

II is a must, but III? Not so sure about that.

Wei 12 months ago

I think I and III should be included too!

Rebbecca 1 year ago

Definitely II is important for clarity.

Justine 1 year ago

Hmm, I'm not totally sure about this one. I know 5G is supposed to be faster and have lower latency, but I'm not confident I can identify the specific 4G limitations. I'll have to think it through carefully.

Emilio 1 year ago

Hmm, I'm a bit confused by the requirement to reference the level attribute of the record element in the scenario element. I'll need to review my XML schema knowledge to make sure I understand how to handle that.

Bo 1 year ago

Hmm, I'm not too familiar with the details of that specific hack, so I'll have to think this through carefully. Maybe I can eliminate a few options that don't seem as relevant.

Shaun 1 year ago

The wording of the question is a bit confusing to me. I'll need to carefully review my notes on RRC signaling to determine which specific event is being referenced.

AICPA CPA-Financial Exam - Topic 2 Question 38 Discussion