2022 Realistic Verified FAR exam dumps Q&As - FAR Free Update
Use Real FAR Dumps - 100% Free FAR Exam Dumps
NEW QUESTION 14
Which of the following must be included in a company's summary of significant accounting policies in the
notes to the financial statements?
- A. Summary of long-term debt outstanding.
- B. Schedule of fixed assets.
- C. Description of current year equity transactions.
- D. Revenue recognition policies.
Answer: D
Explanation:
Choice "d" is correct. The summary of significant accounting policies should include "policies." The only
policy in the choices listed is the revenue recognition policies.
Choice "a" is incorrect. A description of current year equity transactions is not a policy. It should be
disclosed somewhere in the footnotes but not in the summary of significant accounting policies.
Choice "b" is incorrect. A summary of long-term debt outstanding is not a policy. It should be disclosed
somewhere in the footnotes but not in the summary of significant accounting policies.
Choice "c" is incorrect. A schedule of fixed assets is not a policy. It should be disclosed somewhere in the
footnotes but not in the summary of significant accounting policies.
NEW QUESTION 15
According to the FASB conceptual framework, comprehensive income includes which of the following?
- A. Option B
- B. Option D
- C. Option C
- D. Option A
Answer: A
Explanation:
Choice "b" is correct. Comprehensive income is the change in equity of a business during a period from
transactions and other events and circumstances from non-owner sources. It includes all changes in
equity except those resulting from investments by owners and distributions to owners. SFAC 6 para 70.
NEW QUESTION 16
On January 2, 20X5, to better reflect the variable use of its only machine, Holly, Inc. elected to change its
method of depreciation from the straight-line method to the units of production method. The original cost
of the machine on January 2, 20X3, was $50,000, and its estimated life was 10 years. Holly estimates that
the machine's total life is 50,000 machine hours. Machine hours usage was 8,500 during 20X4 and 3,500
during 20X3.
Holly's income tax rate is 30%. Holly should report the accounting change in its 20X5 financial statements
as a(n):
- A. Cumulative effect of a change in accounting principle of $2,000 in its income statement.
- B. Adjustment to beginning retained earnings of $2,000.
- C. Cumulative effect of a change in accounting principle of $1,400 in its income statement.
- D. None of the above.
Answer: D
Explanation:
Choice "d" is correct. A change in the method of depreciation is now considered to be both a change in
method and a change in estimate. These changes should be accounted for as changes in estimate and
handled prospectively. The new depreciation method should be used as of the beginning of the year of
change and should start with the current book value of the underlying asset. No retroactive or
retrospective calculations should be made, and no adjustment should be made to retained earnings. The
cumulative effect treatment on the income statement was the treatment of most changes in accounting
principle prior to SFAS No. 154. The adjustment to beginning retained earnings is the treatment now
given to changes in accounting principle by SFAS No. 154. However a change in depreciation method is
no longer accounted for as a change in accounting principle. Choices "a", "b", and "c" are incorrect, per
the above Explanation: .
NEW QUESTION 17
In financial reporting of segment data, which of the following items is always used in determining a
segment's operating income?
- A. Income tax expense.
- B. Sales to other segments.
- C. Gain or loss on discontinued operations.
- D. General corporate expense.
Answer: B
Explanation:
Choice "b" is correct. Sales to other segments would be used in determining a segment's operating
income. Rule: Equity in net income of another company, general corporate expenses, interest, income tax
expense, and gains or losses on discontinued operations are all not included in segment profit unless they
are included in the determination of segment profit reported to the "Chief Operating Decision Maker."
NEW QUESTION 18
According to the FASB conceptual framework, the objectives of financial reporting for business
enterprises are based on:
- A. The need for conservatism.
- B. The needs of the users of the information.
- C. Generally accepted accounting principles.
- D. Reporting on management's stewardship.
Answer: B
Explanation:
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.
Choice "a" is incorrect. Conservatism is an underlying concept for financial accounting but is not the basis
for the objectives. SFAC 2 para. 91-97 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. Generally accepted accounting principles (GAAP) are derived from and
based on the objectives of financial reporting, not the other way around.
NEW QUESTION 19
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 B represents the general accounting treatment
required for these transactions. These treatments are:
. Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the
accounting change or error correction in the 1993 financial statements, and do not restate the 1992
financial statements.
. Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust
1 992 beginning retained earnings if the error or change affects a period prior to 1992.
. Prospective approach - Report 1993 and future financial statements on the new basis but do not restate
1 992 financial statements.
Item to Be Answered
Quo changed from LIFO to FIFO to account for its finished goods inventory.
List B (Select one)
- A. Retroactive or retrospective restatement approach.
- B. Cumulative effect approach.
- C. Prospective approach.
Answer: A
Explanation:
Choice "B" is correct. A change in accounting principle should be shown in the retained earnings
statement of the earliest year presented as an adjustment of the beginning balance. All prior year financial
statements are recast.
NEW QUESTION 20
On August 31, 1992, Harvey Co. decided to change from the FIFO periodic inventory system to the
weighted average periodic inventory system. Harvey is on a calendar year basis. The cumulative effect of
the change is determined:
- A. During 1992 by a weighted average of the purchases.
- B. During the eight months ending August 31, 1992, by a weighted average of the purchases.
- C. As of August 31, 1992.
- D. As of January 1, 1992.
Answer: D
Explanation:
Choice "a" is correct, as of January 1, 1992, the beginning of the year. Rule: The cumulative effect of a
change in accounting principle equals the difference between retained earnings at the beginning of period
of the change and what retained earnings would have been if the change was applied to all affected prior
periods, assuming comparative financial statements are not presented. If comparative statements are
presented, then beginning retained earnings of the earliest year presented is adjusted for the cumulative
effect of the change. We are assuming, based on the answer options given, that Harvey is not presenting
comparative financial statements. Choice "b" is incorrect. The cumulative effect of the change is not
determined as of the date the decision is made. Choices "c" and "d" are incorrect. The cumulative effect of
the change is not determined by a weighted average.
NEW QUESTION 21
Envoy Co. manufactures and sells household products. Envoy experienced losses associated with its
small appliance group. Operations and cash flows for this group can be clearly distinguished from the rest
of Envoy's operations. Envoy plans to sell the small appliance group with its operations. What is the
earliest point at which Envoy should report the small appliance group as a discontinued operation?
- A. When Envoy receives an offer for the segment.
- B. When Envoy classifies it as held for sale.
- C. When Envoy sells the majority of the assets of the segment.
- D. When Envoy first sells any of the assets of the segment.
Answer: B
Explanation:
Choice "a" is correct. The earliest period that a component of an entity can be reported in discontinued
operations is when the component meets the following "held for sale" criteria:
1 . Management commits to a plan to sell the component.
2 . The component is available for immediate sale in its present condition.
3 . An active program to locate a buyer has been initiated.
4 . The sale of the component is probable and the sale is expected to be completed within one year.
5 . The sale of the component is being actively marketed.
6 . It is unlikely that significant change to the plan to sell will be made or that the plan will be withdrawn.
Choices "b", "c", and "d" are incorrect, per the Explanation: above.
NEW QUESTION 22
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 B represents the general accounting treatment
required for these transactions. These treatments are:
. Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the
accounting change or error correction in the 1993 financial statements, and do not restate the 1992
financial statements.
. Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust
1 992 beginning retained earnings if the error or change affects a period prior to 1992.
. Prospective approach - Report 1993 and future financial statements on the new basis but do not restate
1 992 financial statements.
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 B (Select one)
- A. Retroactive or retrospective restatement approach.
- B. Cumulative effect approach.
- C. Prospective approach.
Answer: A
Explanation:
Choice "B" is correct. If comparative FS are issued, restate prior year's FS. If comparative FS are not
issued, restate prior year-end's retained earnings account by "adjusting" (net of tax) the opening balance
of the current retained earnings statement.
NEW QUESTION 23
On January 1, 20X1, Pell Corp. purchased a machine having an estimated useful life of 10 years and no
salvage. The machine was depreciated by the double declining balance method for both financial
statement and income tax reporting. On January 1, 20X6, Pell changed to the straight-line method for
financial statement reporting but not for income tax reporting. Accumulated depreciation at December 31,
2 0X5, was $560,000. If the straight-line method had been used, the accumulated depreciation at
December 31, 20X5, would have been $420,000. Pell's enacted income tax rate for 20X6 and thereafter is
3 0%. The amount shown in the 20X6 income statement for the cumulative effect of changing to the
straight-line method should be:
- A. $98,000 debit.
- B. $140,000 credit.
- C. $98,000 credit.
- D. $0.
Answer: D
Explanation:
Choice "d" is correct. A change in the method of depreciation is now considered to be both a change in
method and a change in estimate. These changes should be accounted for as changes in estimate and
handled prospectively. The new depreciation method should be used as of the beginning of the year of
change and should start with the current book value of the underlying asset. No retroactive or
retrospective calculations should be made, and no adjustment should be made to retained earnings. And,
certainly, the cumulative effect should not be reflected on the income statement any more. Choices "a",
"b", and "c" are incorrect, per the above Explanation: .
NEW QUESTION 24
According to the FASB conceptual framework, the objectives of financial reporting for business
enterprises are based on:
- A. The need for conservatism.
- B. The needs of the users of the information.
- C. Generally accepted accounting principles.
- D. Reporting on management's stewardship.
Answer: B
Explanation:
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
NEW QUESTION 25
An inventory loss from a permanent market decline of $360,000 occurred in May 1989. Cox Co.
appropriately recorded this loss in May 1989 after its March 31, 1989 quarterly report was issued. What
amount of inventory loss should be reported in Cox's quarterly income statement for the three months
ended June 30, 1989?
- A. $180,000
- B. $0
- C. $360,000
- D. $90,000
Answer: C
Explanation:
Choice "d" is correct. $360,000 inventory loss reported for the quarter ended 6-30-89.
Rule: Inventory losses from "permanent market declines" are recognized in the interim period, incurred
and later, if they "turn-around," are recognized as gains in a subsequent interim period only to the extent
of previously reported losses.
Rule: "Temporary" market declines need not be recognized at interim when a "turn-around" can
reasonably be expected to occur before the end of the fiscal year.
Facts: This $360,000 inventory decline is permanent and the entire loss would be recognized in the
quarter interim period incurred (6-30-89).
NEW QUESTION 26
Which of the following should be disclosed in a summary of significant accounting policies?
- A. Basis of profit recognition on long-term construction contracts.
- B. Depreciation expense.
- C. Future minimum lease payments in the aggregate and for each of the five succeeding fiscal years.
- D. Composition of sales by segment.
Answer: A
Explanation:
Choice "a" is correct. The summary of significant accounting policies should disclose policies. The only
policy in this question is the "basis" of profit recognition on long-term construction contracts.
The other disclosures are accounting details and would be disclosed in other footnotes, but not in the
summary of significant accounting policies.
Choice "b" is incorrect. The future minimum lease payments should be disclosed, but not in the summary
of significant accounting policies.
Choice "c" is incorrect. Depreciation expense should certainly be disclosed, but not in the summary of
significant accounting policies.
Choice "d" is incorrect. The composition of sales by segment should be disclosed, but not in the summary
of significant accounting policies.
NEW QUESTION 27
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.
- A. II only.
- B. I and III only.
- C. I and II only.
- D. II and III only.
Answer: C
Explanation:
Choice "d" is correct. The operating losses to be included in Smith's 20X2 income statement would be the
total 20X2 operating losses, regardless of whether those losses occurred before or after the date the
decision to dispose of the component was made, and not any 20X3 operating losses. Projected operating
losses are not anticipated and accrued. Choice "a" is incorrect. The operating losses to be included in
Smith's 20X2 income statement would be the total 20X2 operating losses, regardless of whether those
losses occurred before or after the date the decision to dispose of the component was made, and not any
2 0X3 operating losses. Choice "b" is incorrect. The operating losses to be included in Smith's 20X2
income statement would be the total 20X2 operating losses, regardless of whether those losses occurred
before or after the date the decision to dispose of the component was made, and not any 20X3 operating
losses. Choice "c" is incorrect. The operating losses to be included in Smith's 20X2 income statement
would be the total 20X2 operating losses, regardless of whether those losses occurred before or after the
date the decision to dispose of the component was made, and not any 20X3 operating losses.
NEW QUESTION 28
Which of the following statements best describes an operating procedure for issuing a new Financial
Accounting Standards Board (FASB) statement?
- A. A new statement is issued only after a majority vote by the members of the FASB.
- B. The emerging issues task force must approve a discussion memorandum before it is disseminated to
the public. - C. A new FASB statement can be rescinded by a majority vote of the AICPA membership.
- D. The exposure draft is modified per public opinion before issuing the discussion memorandum.
Answer: A
Explanation:
Choice "c" is correct. A new statement from the FASB is issued only after a majority vote of the members
of the FASB.
Choice "a" is incorrect. There is no necessity for the EITF to approve a discussion memorandum
(presumably the question means a discussion memorandum of the FASB statement itself and not an EITF
statement) before it is disseminated to the public.
Choice "b" is incorrect. There is no necessity for an exposure draft to be modified per public option before
issuing the discussion memorandum (a question can be raised here as to "what" discussion
memorandum"). Exposure drafts are quite/most often modified before they are issued as FASB
statements, but they do not have to be. Whether they are or are not modified is a function of whether the
FASB thinks they should be modified, partly due to the public comments that have been received.
Choice "d" is incorrect. There is no way to rescind a new FASB statement, although, in reality, a FASB
statement can be rescinded by the issuance of a new statement on the same subject. However, even if
there was a way to rescind a new FASB statement, it would not be by a majority vote of the AICPA
membership, but by a majority vote of the members of the FASB. Reporting Net Income
NEW QUESTION 29
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 B represents the general accounting treatment
required for these transactions. These treatments are:
. Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the
accounting change or error correction in the 1993 financial statements, and do not restate the 1992
financial statements.
. Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust
1 992 beginning retained earnings if the error or change affects a period prior to 1992.
. Prospective approach - Report 1993 and future financial statements on the new basis but do not restate
1 992 financial statements.
Item to Be Answered
As a result of a production breakthrough, Quo determined that manufacturing equipment previously
depreciated over 15 years should be depreciated over 20 years.
List B (Select one)
- A. Cumulative effect approach.
- B. Retroactive or retrospective restatement approach.
- C. Prospective approach.
Answer: C
Explanation:
Choice "C" is correct. This affects only the prospective (current and subsequent) periods - not prior
periods, not retained earnings.
NEW QUESTION 30
On December 31, 20X2, the Board of Directors of Maxy Manufacturing, Inc. committed to a plan to
discontinue the operations of its Alpha division. Maxy estimated that Alpha's 20X3 operating loss would
be $500,000 and that the fair value of Alpha's facilities was $300,000 less than their carrying amounts.
The estimate for 20X3 turned out to be correct. Alpha's 20X2 operating loss was $1,400,000, and the
division was actually sold for $400,000 less than its carrying amount. Maxy's effective tax rate is 30%.
In its 20X3 income statement, what amount should Maxy report as loss from discontinued operations?
- A. $600,000
- B. $350,000
- C. $420,000
- D. $500,000
Answer: C
Explanation:
Choice "c" is correct. The 20X3 loss from discontinued operations would include both the 20X3 operating
loss of $500,000 (which turned out to be a correct estimate) and the "additional" loss (on disposal) of
$ 100,000, net of tax, for a total of $600,000 x .70 or $420,000. Choice "a" is incorrect. It includes the 20X3
operating loss of $500,000 but not the $300,000 impairment loss but does report the 20X3 operating loss
net of tax. Choice "b" is incorrect. It includes the 20X3 operating loss of $500,000, but not the $100,000
loss on disposal, and reports the 20X3 operating loss gross of tax and not net of tax. Choice "d" is
incorrect. It reports the 20X3 loss from discontinued operations gross of tax and not net of tax. The 20X3
loss from discontinued operations should include both the 20X3 operating loss of $500,000 and the loss
on disposal of $100,000, net of tax, for a total of $600,000 x .70 or $420,000.
NEW QUESTION 31
A transaction that is unusual in nature and infrequent in occurrence should be reported separately as a
component of income:
- A. After cumulative effect of accounting changes and after discontinued operations of a segment of a
business. - B. After cumulative effect of accounting changes and before discontinued operations of a segment of a
business. - C. Before cumulative effect of accounting changes and before discontinued operations of a segment of a
business. - D. After discontinued operations of a segment of a business.
Answer: D
Explanation:
Choice "d" is correct. An extraordinary item (a transaction that is both "unusual in nature" and "infrequent
in occurrence") should be reported separately as a component of income after discontinued operations of
a segment of a business.
The cumulative effect of a change in accounting principle is shown on the retained earnings statement.
This is why memorizing the mnemonic "idea" is so important.
NEW QUESTION 32
Opto Co. is a publicly-traded, consolidated enterprise reporting segment information. Which of the
following items is a required enterprise-wide disclosure regarding external customers?
- A. The fact that transactions with a particular external customer constitute more than 10% of the total
enterprise revenues. - B. The identity of any external customer providing 10% or more of a particular operating segment's
revenue. - C. The identity of any external customer considered to be "major" by management.
- D. Information on major customers is not required in segment reporting.
Answer: A
Explanation:
Choice "a" is correct. In order to conform to GAAP, financial statements for public business enterprises
must report segment information about a company's major customers if that customer provides 10% or
more of the combined revenue, internal and external, of all operating segments.
Choice "b" is incorrect. Revenue is 10% of ALL operating segments not "a particular" segment.
Choice "c" is incorrect. Disclosure is not at management's discretion.
Choice "d" is incorrect. Disclosure is required.
NEW QUESTION 33
In financial reporting of segment data, which of the following must be considered in determining if an
industry segment is a reportable segment?
- A. Option D
- B. Option C
- C. Option B
- D. Option A
Answer: D
Explanation:
Choice "a" is correct. A segment is considered reportable if its reported revenue, including sales to
unaffiliated customers and intersegment sales, is 10% or more of the combined revenue (unaffiliated and
intersegment) of all operating segments.
Choices "b", "c", and "d" are incorrect, per the above Explanation: .
NEW QUESTION 34
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.
During 1993, Quo increased its investment in Worth, Inc. from a 10% interest, purchased in 1992, to 30%,
and acquired a seat on Worth's board of directors. As a result of its increased investment, Quo changed
its method of accounting for investment in Worth, Inc. from the cost method to the equity method.
List A
- A. Change in accounting principle.
- B. Correction of an error in previously presented financial statements.
- C. Change in accounting estimate.
- D. Neither an accounting change nor an accounting error.
Answer: D
Explanation:
Choice "d" is correct. A change from the cost method (less than 20% ownership) to the equity method
(20% or more ownership or a Board seat or other significant influence) of accounting for investment in an
investee is neither an accounting change nor an accounting error. If it is not an accounting change, it
cannot be a change in accounting principle or a change in accounting estimate since those two types of
changes are both accounting changes.
There is a considerable amount of controversy on this particular answer. Some people think that this
change is a change in accounting principle (something certainly changed, but was it the accounting
principle?), and others think it is a change in accounting entity (which is not one of the available answers;
anyway, did the accounting entity actually change or is it the same entity accounted for differently?).
Under SFAS No. 154, a change in accounting principle is treated retrospectively and a change in
accounting entity is treated retrospectively.
This kind of change (cost to equity) has never been specifically identified in any accounting literature as
either a change in accounting principle or a change in accounting entity. The words "cost method" were
never mentioned in APB 20 (other than the full cost method for oil & gas companies, which is an entirely
different subject), nor was it mentioned in SFAS No. 154. It was, however, discussed in APB 18 (the
pronouncement for the equity method) in Paragraph 19m (bold added): "An investment in common stock
of an investee that was previously accounted for on other than the equity method may become qualified
for use of the equity method by an increase in the level of ownership described in paragraph 17 (i.e.,
acquisition of additional voting stock by the investor, acquisition or retirement of voting stock by the
investee, or other transactions). When an investment qualifies for use of the equity method, the investor
should adopt the equity method of accounting. The investment, results of operations (current and prior
periods presented), and retained earnings of the investor should be adjusted retroactively in a manner
consistent with the accounting for a step-by-step acquisition of a subsidiary."
What does all this mean? It means that, when there is a change in the percentage of ownership that
changes accounting from the cost method to the equity method, the change is treated retroactively (just
like changes in accounting entity used to be treated, although they are now treated retrospectively). It
does not say that the change is a change in accounting principle or anything else. Nothing in SFAS
No.154 changed this treatment. So all this still makes Choice "d" correct. This whole issue might easily be
considered to be splitting hairs, at the very least. Some questions on the CPA exam are just that way.
Most are not.
NEW QUESTION 35
On December 31, 20X2, the Board of Directors of Maxy Manufacturing, Inc. committed to a plan to
discontinue the operations of its Alpha division. Maxy estimated that Alpha's 20X3 operating loss would
be $500,000 and that the fair value of Alpha's facilities was $300,000 less than their carrying amounts.
Alpha's 20X2 operating loss was $1,400,000, and the division was actually sold for $400,000 less than its
carrying amount in 20X3. Maxy's effective tax rate is 30%.
In its 20X2 income statement, what amount should Maxy report as loss from discontinued operations?
- A. $1,190,000
- B. $980,000
- C. $1,400,000
- D. $1,700,000
Answer: A
Explanation:
Choice "b" is correct. Since the fair value of Alpha's facilities was $300,000 less than its carrying value,
there has been an impairment loss, and that loss should be recognized in 20X2. That $300,000
impairment loss plus the $1,400,000 20X2 operating loss would be recognized in 20X2 net of tax. The
total loss would be $1,700,000 * 70% (100% - 30%) or $1,190,000. Choice "a" is incorrect. It includes the
2 0X2 operating loss of $1,400,000 but not the $300,000 impairment loss but does report the 20X2
operating loss net of tax. Choice "c" is incorrect. It includes the 20X2 operating loss of $1,400,000, but not
the $300,000 impairment loss, and reports the 20X2 operating loss gross of tax and not net of tax. Choice
"d" is incorrect. It reports the 20X2 loss from discontinued operations gross of tax and not net of tax.
NEW QUESTION 36
......
Pass FAR exam Updated 165 Questions: https://www.actual4labs.com/AICPA/FAR-actual-exam-dumps.html
FAR Exam Dumps, Test Engine Practice Test Questions: https://drive.google.com/open?id=1RBYHvmbnujD9BfXzhjG36Cut6ShG6L4T