Free AICPA FAR Practice Test & Real Exam Questions

Grum Corp., a publicly-owned corporation, is subject to the requirements for segment reporting. In its
income statement for the year ended December 31, 1991, Grum reported revenues of $50,000,000,
operating expenses of $47,000,000, and net income of $3,000,000. Operating expenses include payroll
costs of $ 15,000,000. Grum's combined identifiable assets of all industry segments at December 31,
1 991, were $40,000,000.
Cott Co.'s four business segments have revenues and identifiable assets expressed as percentages of
Cott's total revenues and total assets as follows:

Which of these business segments are deemed to be reportable segments?

The following question is based on the following:
Vane Co.'s trial balance of income statement accounts for the year ended December 31, 2002, included
the following: Vane's income tax rate is 30%.

In Vane's 2002 multiple-step income statement, what amount should Vane report as income from
continuing operations?

According to the FASB conceptual framework, which of the following situations violates the concept of
reliability?

During 1992, Krey Co. increased the estimated quantity of copper recoverable from its mine. Krey uses
the units of production depletion method. As a result of the change, which of the following should be
reported in Krey's 1992 financial statements?

According to the FASB conceptual framework, which of the following is an essential characteristic of an
asset?

A statement of cash flows for a development stage enterprise:

According to the FASB conceptual framework, which of the following attributes would not be used to
measure inventory?

In 1990, Teller Co. incurred losses arising from its guilty plea in its first antitrust action, and from a
substantial increase in production costs caused when a major supplier's workers went on strike.
Which of these losses should be reported as an extraordinary item?

On January 1, 1991, Brecon Co. installed cabinets to display its merchandise in customers' stores.
Brecon expects to use these cabinets for five years. Brecon's 1991 multi-step income statement should
include:

FASB Interpretations of Statements of Financial Accounting Standards have the same authority as the
FASB:

Earnings per share data should be reported on the income statement for:

Which of the following should be disclosed for each reportable operating segment of an enterprise?

In financial reporting of segment data, which of the following items is always used in determining a
segment's operating income?

On November 1, 20X2, Smith Co. contracted to dispose of an industry segment. Throughout 20X2 the
segment had operating losses. These losses were expected to continue until the segment's disposition.
If a loss is projected on final disposition, how much of the operating losses should be included in the loss
from discontinued operations reported in Smith's 20X2 income statement?
I. Operating losses for the period January 1 to October 31, 20X2.
II. Operating losses for the period November 1 to December 31, 20X2.
III. Estimated operating losses for the period January 1 to February 28, 20X3.