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AICPA CPA-Financial Exam Questions
- Topic 1: Financial Statement Concepts
- Topic 2: General Principles of Financial Statement Presentation and Accounting Policies
- Topic 3: Special Accounting Considerations for Certain Financial Assets and Liabilities.
Free AICPA CPA-Financial Exam Actual Questions
Note: Premium Questions for CPA-Financial were last updated On Apr. 06, 2026 (see below)
Which of the following facts concerning fixed assets should be included in the summary of significant accounting policies?
Choice 'c' is correct. Yes - No.
Yes - 'Depreciation methods' should be disclosed in the 'summary of significant accounting policies.'
No - Composition of fixed assets (or any other account) should not be disclosed in the 'summary of significant accounting policies.'
According to the FASB conceptual framework, the objectives of financial reporting for business enterprises are based on:
Choice 'd' is correct. The FASB conceptual framework states that the objectives of financial reporting stem from the informational needs of the external users of the information. SFAC 1 para. 28
Choice 'a' is incorrect. Generally accepted accounting principles (GAAP) are derived from and based on the objectives of financial reporting, not the other way around.
Choice 'b' is incorrect. Information concerning management's stewardship is only one aspect of the information financial statements are intended to provide. SFAC 1 para. 50
Choice 'c' is incorrect. Conservatism is an underlying concept for financial accounting but is not the basis for the objectives. SFAC 2 para. 91-97
Which of the following information should be included in Melay, Inc.'s 1992 summary of significant accounting policies?
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.'
During the first quarter of 1993, Tech Co. had income before taxes of $200,000, and its effective income tax rate was 15%. Tech's 1992 effective annual income tax rate was 30%, but Tech expects its 1993 effective annual income tax rate to be 25%. In its first quarter interim income statement, what amount of income tax expense should Tech report?
Choice 'c' is correct. Interim period tax expense is the estimated annual effective tax rate (25% in this case) applied to the year-to-date income before taxes minus the tax expense recognized in previous interim periods. Since this question involves the first quarter, there are no previous interim periods. 25% $200,000 = $50,000. FIN 18, para. 16
Choice 'a' is incorrect. Income tax expense is reported in interim income statements.
Choice 'b' is incorrect. The 1993 annual estimated tax rate, not the first quarter effective tax rate, is used to calculate income tax expense for interim statements.
Choice 'd' is incorrect. The 1993 annual estimated tax rate, not the 1992 annual effective tax rate, is used to calculate income tax expense for interim statements.
Which of the following facts concerning fixed assets should be included in the summary of significant accounting policies?
Choice 'c' is correct. Yes - No.
Yes - 'Depreciation methods' should be disclosed in the 'summary of significant accounting policies.'
No - Composition of fixed assets (or any other account) should not be disclosed in the 'summary of significant accounting policies.'
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