AICPA CPA-Financial Exam - Topic 3 Question 35 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 35
Topic #: 3

[All CPA-Financial Questions]

Which of the following information should be included in Melay, Inc.'s 1992 summary of significant accounting policies?

AProperty, plant, and equipment is recorded at cost with depreciation computed principally by the straight-line method.

BDuring 1992, the Delay component was sold.

CBusiness segment 1992 sales are Alay $1M, Belay $2M, and Celay $3M.

DFuture common share dividends are expected to approximate 60% of earnings.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. Computing depreciation principally by the straight-line method is a GAAP method of depreciation that should be described in the 'summary of significant accounting policies.'

Choice 'b' is incorrect. Disclosing the sale of a component of a business is required (and is covered in the lecture on 'discontinued operations' in the F1 class) but is not a 'significant accounting policy.'

Choice 'c' is incorrect. Disclosing 'sales' of segments is required, but is not a 'significant accounting policy.'

Choice 'd' is incorrect. 'Estimates of future common share dividends' are not appropriate disclosures for the financial statements. They might be appropriate for the 'presidents letter to shareholders.'

by Adell at May 04, 2022, 05:55 AM

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5 months ago

Okay, I've got this. The answer is option A - \copy company TO 'company.txt' WITH ','. That will export the data from the 'company' table to a text file called 'company.txt' with a comma as the delimiter. Easy peasy!

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