AICPA Exam CPA-Financial Topic 3 Question 104 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 104
Topic #: 3

[All CPA-Financial Questions]

What is the underlying concept that supports the immediate recognition of a contingent loss?

ASubstance over form.

BConsistency.

CMatching.

DConservatism.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. Expensing insurance premiums when paid (rather than allocating them to the periods benefited) is a correction of an error in previously presented financial statements.

by Noah at Dec 05, 2024, 01:15 PM

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Darci

2 days ago

Conservatism is the way to go! It's the only option that makes sense for recognizing contingent losses.

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Dominque

4 days ago

Hmm, that makes sense too. Both answers could be valid depending on the context.

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Catina

5 days ago

I disagree, I believe it's A) Substance over form.

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Dominque

12 days ago

I think the answer is D) Conservatism.

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