FAR Practice Exam - Kaplan CPA Review 1. （模拟考试-卡普兰注册会计师审查1。）.pdf

FAR Practice Exam - Kaplan CPA Review 1. Correct answer: Unusual in nature and infrequent in occurrence. A material loss that is either unusual in nature or infrequent in occurrence, but not both, would be reported as a separate component of income from continuing operations (“above the line”). Extraordinary items, which are unusual in nature and infrequent in occurrence, are reported as separate components of net income after income from continuing operations. A cumulative effect type change in accounting principle is no longer reported on the income statement (rather retrospective application is required when a company changes accounting principles). However, this is a material loss and without additional information would not be classified as such regardless. This distracter is trying to trick students with the use of an outdated concept. When a material item is either unusual in nature or infrequent in occurrence, but not both, it is reported as a separate component of income from continuing operations (“above the line”). 2. Correct answer: $5,560 Leaf will receive a total of 5 payments of $5,009 each, or $25,045 for the note. Since the amount paid for the note was $19,485 but the payments received equal $25,045, the difference of $5,560 would be recognized as interest income over the term of the note. 3. Correct answer: a bargain purchase option exists. The lease would be classified as a capital lease if it meets just one of the following criteria: 1) A bargain purchase option exists. 2) The lease period is at least 75% of asset’s life. 3) The title is transferred to the lessee at the end of the lease period. 4) The present value of the lease payments are equal to or exceed 90% of the fair value of the leased property to the lessor. 4. Correct answer: Prior period adjustment resulting from the change in accounting principle An error includes a mathematical mistake, mistakes in the application of U.S. GA