AICPA CPA Financial Accounting and Reporting - FAR Exam Practice Test

On December 2, 20X1, Flint Corp.'s board of directors voted to discontinue operations of its frozen food
division and to sell the division's assets on the open market as soon as possible. The division reported net
operating losses of $20,000 in December and $30,000 in January. On February 26, 20X2, sale of the
division's assets resulted in a gain of $90,000. Assuming that the frozen foods division qualifies as a
component of the business and ignoring income taxes, what amount of gain/loss from discontinued
operations should Flint recognize in its income statement for 20X2?

A planned volume variance in the first quarter, which is expected to be absorbed by the end of the fiscal
period, ordinarily should be deferred at the end of the first quarter if it is:

Taft Corp. discloses supplemental industry segment information. The following information is available for
1 992:

Additional 1992 expenses, not included above, are as follows:
Indirect operating expenses $7,200
General corporate expenses 4,800
Segment C's 1992 operating profit was:

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

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

In open market transactions, Gold Corp. simultaneously sold its long-term investment in Iron Corp. bonds
and purchased its own outstanding bonds. The broker remitted the net cash from the two transactions.
Gold's gain on the purchase of its own bonds exceeded its loss on the sale of the Iron bonds. Assume the
transaction to purchase its own outstanding bonds is unusual in nature and has occurred infrequently.
Gold should report the:

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

Which of the following types of entities are required to report on business segments?

In which of the following situations should a company report a prior-period adjustment?

The effect of a change in accounting principle that is inseparable from the effect of a change in accounting
estimate should be reported: