AICPA CPA-Financial Exam - Topic 2 Question 98 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 98
Topic #: 2

[All CPA-Financial Questions]

A segment of Ace Inc. was discontinued during 1992. Ace's loss from discontinued operations should not:

AInclude employee relocation costs associated with the decision to dispose.

BExclude operating losses from the date the decision to dispose of the segment was made until the end of 1992.

CInclude additional pension costs associated with the decision to dispose.

DInclude operating losses of the current period up to the date the decision to dispose of the segment was made.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. $120,000 expense included in the determination of net income or loss for the sixmonth interim period ended June 30, 1991.

by Louis at Sep 16, 2024, 04:42 PM

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Shalon

3 months ago

D is just standard practice, nothing surprising there.

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Annabelle

3 months ago

B is a tricky one, but I think it makes sense to exclude those losses.

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Clorinda

3 months ago

Surprised that employee relocation costs aren't counted!

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Elliott

4 months ago

I disagree, I think C should be included too.

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Lashawn

4 months ago

A is definitely correct, those costs shouldn't be included.

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Jesusa

4 months ago

I feel like operating losses up to the decision date should be included, but I’m not completely confident. I wish I had reviewed that part more thoroughly.

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Anthony

4 months ago

I practiced a similar question where we had to determine what costs to include or exclude. I think employee relocation costs might be one of those that shouldn’t be included.

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Louvenia

4 months ago

I’m a bit unsure about the timing of the losses. I think we might need to exclude losses from before the decision was made, but I can't recall the exact details.

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Mabelle

5 months ago

I remember we discussed how discontinued operations should only reflect losses directly tied to the segment's closure. I think that might rule out some costs.

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Keva

5 months ago

This is a tricky one, but I'm going to make an educated guess. I'll review my notes on discontinued operations to see if that helps me narrow it down.

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Audria

5 months ago

I'm pretty confident I know the right answer here. The question is asking what should not be included, so I'll eliminate the options that should be included.

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Arlette

5 months ago

Hmm, I'm a bit confused by the wording here. I'll need to re-read the question and options carefully to make sure I don't miss any important nuances.

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Portia

5 months ago

This seems like a straightforward accounting question, but I want to make sure I understand the key details before selecting an answer.

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Janessa

5 months ago

Okay, I think I've got it. The key is to identify what should not be included in the loss from discontinued operations. Let me think this through step-by-step.

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Willetta

10 months ago

This question is making my brain hurt more than the time I tried to balance a chemical equation. But hey, at least it's not asking about quantum physics!

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Stefanie

9 months ago

C) Include additional pension costs associated with the decision to dispose.

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Thurman

9 months ago

B) Exclude operating losses from the date the decision to dispose of the segment was made until the end of 1992.

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Daniel

9 months ago

A) Include employee relocation costs associated with the decision to dispose.

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Craig

10 months ago

Hmm, I'm leaning towards C. Additional pension costs seem like they should be part of the loss, doesn't it? Unless we're trying to downplay the whole thing.

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Leonardo

10 months ago

I'm going with D. Gotta include those operating losses up to the date of the decision, right? Otherwise, it's like sweeping the past under the rug.

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Veronika

8 months ago

Yeah, D is the way to go. It's important to include those operating losses in the calculation.

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Daisy

8 months ago

I agree, D seems like the most logical choice. We need to consider all the losses up to the disposal decision.

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Xochitl

9 months ago

I think you're right, D makes sense. We shouldn't ignore those operating losses.

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Christiane

10 months ago

Wait, are we supposed to include employee relocation costs or not? This question is giving me a headache.

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Reta

8 months ago

D) Include operating losses of the current period up to the date the decision to dispose of the segment was made.

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Clorinda

8 months ago

C) Include additional pension costs associated with the decision to dispose.

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Dan

9 months ago

B) Exclude operating losses from the date the decision to dispose of the segment was made until the end of 1992.

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Linette

9 months ago

A) Include employee relocation costs associated with the decision to dispose.

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Lisbeth

11 months ago

I think the answer is B. The operating losses from the date the decision to dispose of the segment was made until the end of 1992 should be excluded, not included.

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