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Admission Test Certified Public Accountant (Financial Accounting & Reporting) Sample Questions:
1. Mellow Co. depreciated a $12,000 asset over five years, using the straight-line method with no salvage value. At the beginning of the fifth year, it was determined that the asset will last another four years. What amount should Mellow report as depreciation expense for year 5?
A) $2,400
B) $1,500
C) $600
D) $900
2. In the hierarchy of generally accepted accounting principles, APB Opinions have the same authority as AICPA:
A) Issues Papers.
B) Statements of Position.
C) Accounting Research Bulletins.
D) Industry Audit and Accounting Guides.
3. On March 15, 1992, Krol Co. paid property taxes of $90,000 on its office building for the calendar year 1992. On April 1, 1992, Krol paid $150,000 for unanticipated repairs to its office equipment. The repairs will benefit operations for the remainder of 1992. What is the total amount of these expenses that Krol should include in its quarterly income statement for the three months ended June 30, 1992?
A) $172,500
B) $72,500
C) $97,500
D) $37,500
4. While preparing its 1991 financial statements, Dek Corp. discovered computational errors in its 1990 and 1989 depreciation expense. These errors resulted in overstatement of each year's income by $25,000, net of income taxes. The following amounts were reported in the previously issued financial statements:
Dek's 1991 net income is correctly reported at $180,000. Which of the following amounts should be reported as prior period adjustments and net income in Dek's 1991 and 1990 comparative financial statements?
A) Option A
B) Option B
C) Option D
D) Option C
5. A change from the cost approach to the market approach of measuring fair value is considered to be what type of accounting change?
A) Change in accounting principle.
B) Change in accounting estimate.
C) Error correction.
D) Change in valuation technique.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: B |






