AICPA Exam CPA-Financial Topic 2 Question 73 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 73
Topic #: 2

The following items were among those that were reported on Lee Co.'s income statement for the year ended December 31, 1989:

The office space is used equally by Lee's sales and accounting departments. What amount of the abovelisted items should be classified as general and administrative expenses in Lee's multiple-step income statement?

A$290,000

B$325,000

C$410,000

D$500,000

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. The concept of reliability in financial reporting includes; neutrality, representational faithfulness and verifiability.

Choices 'a', 'b', and 'c' are incorrect, per the above.

by Marge at Aug 07, 2023, 04:05 PM

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Sherman

12 hours ago

Hmm, this looks tricky. I'm going to have to think carefully about how to allocate those expenses between sales and accounting.

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Hoa

18 days ago

Why do you think it's C)?

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Terrilyn

23 days ago

I disagree, I believe the correct answer is C) $410,000.

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Hoa

23 days ago

I think the answer is A) $290,000.

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