AICPA Exam CPA-Financial Topic 3 Question 45 Discussion

Actual exam question for AICPA's CPA Financial Accounting and Reporting exam

Question #: 45
Topic #: 3

[All CPA Financial Accounting and Reporting 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?

A$290,000

B$325,000

C$410,000

D$500,000

Show Suggested Answer

Suggested Answer: A

Note: 1/2 of the office space of $240,000 was used by the sales department, which should be allocated to 'selling expenses' (not general and administrative).

Choice 'a' is correct. $290,000.

by Cecily at May 08, 2022, 04:00 PM

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