AICPA Exam CPA-Financial Topic 3 Question 48 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 48
Topic #: 3

[All CPA-Financial Questions]

According to the FASB conceptual framework, an entity's revenue may result from:

AA decrease in an asset from primary operations.

BAn increase in an asset from incidental transactions.

CAn increase in a liability from incidental transactions.

DA decrease in a liability from primary operations.

Show Suggested Answer

Suggested Answer: D

Rule: Revenues are inflows or other enhancements of assets and/or settlements (decreases) in liabilities resulting from the entity's ongoing major operations, not from 'incidental' operations.

Choice 'd' is correct. An entity's revenue may result from a decrease in a liability from primary operations.

by Rebecka at May 03, 2022, 11:52 PM

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