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Admission Test Financial-Accounting-Reporting Exam Overview:

Admission Test Financial-Accounting-Reporting Exam Syllabus Topics:

Admission Test Certified Public Accountant (Financial Accounting & Reporting) Sample Questions:

1. APB Opinion No. 28, Interim Financial Reporting, concluded that interim financial reporting should be viewed primarily in which of the following ways?

A) As if the interim period were an annual accounting period.
B) As useful only if activity is spread evenly throughout the year.
C) As reporting for an integral part of an annual period.
D) As reporting under a comprehensive basis of accounting other than GAAP.

2. Which of the following should be disclosed in a summary of significant accounting policies?
I. Management's intention to maintain or vary the dividend payout ratio.
II. Criteria for determining which investments are treated as cash equivalents.
III. Composition of the sales order backlog by segment.

A) II only.
B) I and III.
C) I only.
D) II and III.

3. Which of the following is true regarding the comparison of managerial to financial accounting?

A) Managerial accounting has a past focus and financial accounting has a future focus.
B) Managerial accounting is generally more precise.
C) Managerial accounting need not follow generally accepted accounting principles (GAAP) while financial accounting must follow them.
D) The emphasis on managerial accounting is relevance and the emphasis on financial accounting is timeliness.

4. On January 2, 1993, Quo, Inc. hired Reed to be its controller. During the year, Reed, working closely with Quo's president and outside accountants, made changes in accounting policies, corrected several errors dating from 1992 and before, and instituted new accounting policies.
Quo's 1993 financial statements will be presented in comparative form with its 1992 financial statements.
This question represents one of Quo's transactions. List A represents possible clarifications of these transactions as: a change in accounting principle, a change in accounting estimate, a correction of an error in previously presented financial statements, or neither an accounting change nor an accounting error.
Item to Be Answered
During 1993, Quo determined that an insurance premium paid and entirely expensed in 1992 was for the period January 1, 1992, through January 1, 1994.
List A (Select one)

A) Neither an accounting change nor an accounting error.
B) Change in accounting estimate.
C) Change in accounting principal.
D) Correction of an error in previously presented financial statements.

5. On January 2, 1993, Quo, Inc. hired Reed to be its controller. During the year, Reed, working closely with Quo's president and outside accountants, made changes in accounting policies, corrected several errors dating from 1992 and before, and instituted new accounting policies.
Quo's 1993 financial statements will be presented in comparative form with its 1992 financial statements.
This question represents one of Quo's transactions. List A represents possible clarifications of these transactions as: a change in accounting principle, a change in accounting estimate, a correction of an error in previously presented financial statements, or neither an accounting change nor an accounting error.
Item to Be Answered
Quo changed from FIFO to average cost to account for its raw materials and work in process inventories.
List A (Select one)

A) Neither an accounting change nor an accounting error.
B) Change in accounting estimate.
C) Change in accounting principal.
D) Correction of an error in previously presented financial statements.

Solutions: