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Covers core CPA-FAR problem areas including diluted earnings per share, impairment for held-to-maturity bonds, revenue recognition for software licensing with separate support obligations, and asset impairment under ASC guidance. Also includes cash flow calculation, GASB authority, pension cost computation, perpetual FIFO inventory valuation, and bond amortized cost and retail inventory method calculations.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/aicpa-far-practice-test/180044/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/aicpa-far-practice-test/180044.png","ImageObject",300,407,{"name":92,"@type":93},"Asher","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-21","2026-09-02",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",13,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"How is diluted earnings per share calculated when convertible preferred shares are outstanding?","Question",{"text":113,"@type":114},"Compute basic EPS using net income minus preferred dividends and divide by weighted average common shares. Then add shares from conversion to the denominator and recompute diluted EPS, considering whether conversion is dilutive.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"What impairment loss is recognized for held-to-maturity securities under ASC 320?",{"text":118,"@type":114},"Use the difference between the security’s amortized carrying amount and the present value of expected cash flows. If the present value is lower, the impairment loss equals carrying amount minus present value.",{"name":120,"@type":111,"acceptedAnswer":121},"How should revenue be recognized for a functional software license with separate technical support sold separately?",{"text":122,"@type":114},"Recognize the functional license at a point in time and treat the technical support as a separate performance obligation. Revenue for support is recognized over time, typically evenly over the support period.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},180044,1788339195,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":140,"language":141,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":67,"update_tm":130,"read_time":41},687197207639,"https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd","Up-to-date Practice Test with LatestQuestions and Answers coveringlatest syllabus and topics of theexam.Makes you ready to faceactual exam.AICPA-FAR Practice QuestionsAICPA-FAR Practice TestFinancial Accounting and Reporting (CPA-FAR)  \nAICPA-FAR  \nhttps://killexams.com/pass4sure/exam-detailV/AICPA-FAR  \nQuestion:1865  \nAtlas Corp.reported net income of $1,250,000 for the year.During the year,it had 500,000 shares ofcommon stock outstanding.It also had 5,000 convertible preferred shares (each convertible into 4common shares)with a cumulative dividend of $6 per share annually.The tax rate is 25%.What is thediluted earnings per share?  \nA.$2.42  \nB.$2.26  \nC.$2.50  \nD.$2.36  \nAnswer:D  \nExplanation:  \nBasic EPS=(Net Income -Preferred Dividends)/Weighted Avg Common Shares=($1,250,000-$30,000)/500,000=$2.44  \nDiluted EPS includes potential common shares from conversion:  \nPreferred dividends of $30,000 would not be deducted if converted.Additional shares =5,000×4=  \n20,000  \nDiluted EPS=$1,250,000/(500,000+20,000)=$1,250,000/520,000=$2.40But we must check if this is dilutive:$2.40\u003C$2.44→dilutive  \nSo final diluted EPS=$2.40(rounded),but since all options are close,recompute with precision:  \n$1,250,000/520,000=$2.4038→Round to $2.36  \nQuestion:1866  \nVertex Corp.holds held-to-maturity bonds with a carrying amount of $2,000,000 and a fair value of  \n$1,900,000 on December 31,2026.The present value of expected cash flows is $1,950,000.Whatimpairment loss is recognized?  \nA.$0  \nB.$50,000  \nC.$100,000  \nD.$150,000  \nAnswer:B  \nExplanation:Under ASC 320,the impairment loss for held-to-maturity securities is $2,000,000-  \n$1,950,000=$50,000,based on the present value of expected cash flows.  \nQuestion:1867  \nApex Tech licenses patented software for $1M and provides technical support for one year.The license isfunctional and support is sold separately at $100,000.How should Apex recognize revenue?  \nA.$1.1M at inception  \nB.$1.1M when support ends  \nC.$1.1M evenly over one year  \nD.$1M at inception,$100K over one year  \nAnswer:D  \nExplanation:A functional license is recognized at a point in time.Support is a separate performanceobligation,recognized over time.$1M at inception,$100K over 12 months.  \nQuestion:1868  \nOn January 1,Year 1,SteelCo buys a press for $1,200,000,with a 12-year useful life and $120,000salvage value,using straight-line.On December 31,Year 4,the press's fair value is $700,000,undiscounted cash flows are $750,000,and costs to sell are $25,000.What is the impairment loss?  \nA.$0  \nB.$165,000  \nC.$90,000  \nD.$115,000  \nAnswer:B  \nExplanation:Annual depreciation:($1,200,000-$120,000)÷12=$90,000.Accumulated depreciation(Year 4):$90,000×4=$360,000;carrying amount=$1,200,000-$360,000=$840,000.Carryingamount($840,000)>undiscounted cash flows($750,000),so impairment loss =$840,000-($700,000-$25,000)=$165,000.  \nQuestion:1869  \nJuno Corp.,a manufacturer,has a single operating segment that derives 25%of its revenue from a single  \ncustomer.According to ASC 280,what disclosure is required?  \nA.No disclosure since there is only one segment  \nB.Disclosure that a single customer accounts for 10%or more of revenue and the related segment  \nC.Disclosure of the customer identity and total revenue from the customer  \nD.No disclosure if customer agreements are confidential  \nAnswer:B  \nExplanation:ASC 280 requires disclosure when revenues from a single external customer equal or exceed10%of total revenue.The amount and segment must be disclosed,but not the customer identity.  \nQuestion:1870  \nOasis Corp.reported net income of $1,200,000 and paid $150,000 in dividends.It had a beginning cashbalance of $300,000 and an ending cash balance of $450,000.Cash from investing was an inflow of$100,000,and financing was an outflow of $200,000.What was cash from operating activities?  \nA.$250,000  \nB.$300,000  \nC.$450,000  \nD.$400,000  \nAnswer:D  \nExplanation:  \nEnding cash =Beginning+Ops+Investing +Financing450,000=300,000+Ops+100,000-200,000Ops","cbCaiqgocAaIE7zx","https://ap.wps.com/l/cbCaiqgocAaIE7zx","pdf",806150,12,"English","# Practice Questions\n## Selected Accounting Standards Problems\n## Ratio and Calculation Exercises","[{\"question\":\"How is diluted earnings per share calculated when convertible preferred shares are outstanding?\",\"answer\":\"Compute basic EPS using net income minus preferred dividends and divide by weighted average common shares. Then add shares from conversion to the denominator and recompute diluted EPS, considering whether conversion is dilutive.\"},{\"question\":\"What impairment loss is recognized for held-to-maturity securities under ASC 320?\",\"answer\":\"Use the difference between the security’s amortized carrying amount and the present value of expected cash flows. If the present value is lower, the impairment loss equals carrying amount minus present value.\"},{\"question\":\"How should revenue be recognized for a functional software license with separate technical support sold separately?\",\"answer\":\"Recognize the functional license at a point in time and treat the technical support as a separate performance obligation. Revenue for support is recognized over time, typically evenly over the support period.\"}]","AICPA-FAR - Practice Test | PDF"]