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AICPA Exam CPA-Financial Topic 2 Question 73 Discussion

Actual exam question for AICPA's CPA-Financial exam
Question #: 73
Topic #: 2
[All CPA-Financial Questions]

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?

Show Suggested Answer Hide 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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Vilma
2 months ago
Ugh, I wish they would just give us a calculator and let us do the math. These word problems are the worst!
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Ocie
29 days ago
I agree, it can be tough to figure out without a calculator.
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Carlton
1 months ago
I think the amount classified as general and administrative expenses is $325,000.
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Teri
1 months ago
I know, these word problems can be so frustrating sometimes.
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Willow
2 months ago
This is a piece of cake! I've got this one in the bag. Time to show off my accounting skills.
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Christa
2 months ago
Hold on, is this a multiple-choice question or a fill-in-the-blank? I can never remember which one is which...
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Malinda
1 months ago
I think the correct answer is C) $410,000.
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Salome
1 months ago
The answer options are A) $290,000, B) $325,000, C) $410,000, and D) $500,000.
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Josphine
2 months ago
It's a multiple-choice question.
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Fairy
3 months ago
Wait, is this a trick question? I bet the answer is C, because it's the most expensive option. That's usually how they get you on these exams!
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Kenneth
1 months ago
I agree with you, I think the answer is C) $410,000. It does seem like the most expensive option, but it also makes sense for general and administrative expenses.
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Miesha
2 months ago
I'm not sure, but I think it might be D) $500,000. It seems like a lot, but maybe the office space is a significant expense.
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Jerrod
2 months ago
I think it's A) $290,000. That seems like a reasonable amount for general and administrative expenses.
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Sherman
3 months 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
3 months ago
Why do you think it's C)?
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Terrilyn
3 months ago
I disagree, I believe the correct answer is C) $410,000.
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Hoa
4 months ago
I think the answer is A) $290,000.
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