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AICPA Exam CPA-Financial Topic 3 Question 71 Discussion
Actual exam question for
AICPA's
CPA-Financial exam
Question #: 71
Topic #: 3
[All CPA-Financial Questions]
Topic #: 3
Adam Corp. had the following infrequent transactions during 1989:
* A $190,000 gain on reacquisition and retirement of bonds. This material event is also considered unusual for Adam Corp.
* A $260,000 gain on the disposal of a component of a business. Adam continues similar operations at another location.
* A $90,000 loss on the abandonment of equipment.
In its 1989 income statement, what amount should Adam report as total infrequent net gains that are not considered extraordinary?
Suggested Answer:
D
Choice 'd' is correct. The concept of reliability in financial reporting includes; neutrality, representational faithfulness and verifiability.
Choices 'a', 'b', and 'c' are incorrect, per the above.
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