ACCT 5305 EXAM QUESTIONS AND
ANSWERS 100% PASS 2026/2027
An accountant in this role may perform accounting research in order to understand accounting
positions of the companies or industries his/her agency oversees, and these individuals may
send comment letters to the extent they question a given position.
a. Regulator
b. Investor
c. Auditor
d. Corporate accountant - ANS Regulator
As a result of the Private Company Council's work,
a. Anytime a new ASU is issued, private companies will be granted one additional year to apply
the guidance.
b. Accounting alternatives are now available to private companies within the codification
c. It is not optional for private companies to apply the FASB codification
d. Private company auditors must follow certain standards issued by the PCAOB -
ANS Accounting alternatives are now available to private companies within the codification
@2026 ALLRIGHTS RESERVED 1
,Why was the private company council created to advise the FASB? That is, what is the concern
this body was created to address?
a. The concern that GAAP is currently too complex and too costly for private companies to apply
b. The concern that audit standards for private companies are beginning to diverge from audit
standards for public companies due to new PCAOB issuances
c. The concern that private companies should be able to follow the same standards as
governmental entities
d. The concern that GAAP for private companies is not adequately converged with IFRS for
private companies - ANS The concern that GAAP is currently too complex and too costly for
private companies to apply
Which of the following was not a criticism of the early standard-setting boards, the CAP and
APB?
a. The boards moved too quickly, issuing guidance that was not sufficiently vetted
b. The boards lacked independence, because the members served in only part-time capacity
c. The boards did not have a common conceptual framework serving as a foundation for their
decisions
d. The boards did not respond to emerging issues in a timely manner - ANS The boards
moved too quickly, issuing guidance that was not sufficiently vetted
@2026 ALLRIGHTS RESERVED 2
,Which of the following reflects the correct chronological order of historical and current standard
setters?
a. The SEC was first granted authority, then the Committee on Accounting Procedure (CAP), then
the Accounting Principles Board (APB), and now the Financial Accounting Standards Board
(FASB)
b. APB then the SEC, then the CAP, and now FASB
c. SEC, then APB, then the CAP, and now FASB
d. CAP was first granted authority, then the SEC, then the APB, and now FASB - ANS The SEC
was first granted authority, then the Committee on Accounting Procedure (CAP), then the
Accounting Principles Board (APB), and now the Financial Accounting Standards Board (FASB)
Ideally, companies with sufficient resources will perform accounting research for a transaction
at which time?
a. After financial statements are issued
b. All of the answers are correct
c. At the time when, or after, a transaction occurs
d. Before a transaction occurs - ANS Before a transaction occurs
It may not always be possible to research the accounting for proposed transactions. Research
may be required at the time, or after, a transaction is executed if
@2026 ALLRIGHTS RESERVED 3
, a. Communication broke down between the accounting team and the operations team in the
organization, and the accounting team was not made aware of the proposed transaction
b. The transaction was time-sensitive, and there was not sufficient lead time to research the
account
c. The transaction or event could not have been anticipated, such as issues arising from a fire or
natural disaster
d. The preparer has limited resources and therefore only performs research for final
transactions
e. All of the answers are correct - ANS All of the answers are correct
Which of the following is NOT a benefit of researching a proposed transaction?
a. It allows investors to research a company's choice of accounting methods before the
transaction is finalized
b. The accounting team can prepare timely documentation of the expected accounting position
c. Researching a proposed transaction allows management to evaluate whether the expected
financial statements impacts of the transaction are acceptable
d. The audit team can review the proposed accounting position before the transaction is
recorded
@2026 ALLRIGHTS RESERVED 4
ANSWERS 100% PASS 2026/2027
An accountant in this role may perform accounting research in order to understand accounting
positions of the companies or industries his/her agency oversees, and these individuals may
send comment letters to the extent they question a given position.
a. Regulator
b. Investor
c. Auditor
d. Corporate accountant - ANS Regulator
As a result of the Private Company Council's work,
a. Anytime a new ASU is issued, private companies will be granted one additional year to apply
the guidance.
b. Accounting alternatives are now available to private companies within the codification
c. It is not optional for private companies to apply the FASB codification
d. Private company auditors must follow certain standards issued by the PCAOB -
ANS Accounting alternatives are now available to private companies within the codification
@2026 ALLRIGHTS RESERVED 1
,Why was the private company council created to advise the FASB? That is, what is the concern
this body was created to address?
a. The concern that GAAP is currently too complex and too costly for private companies to apply
b. The concern that audit standards for private companies are beginning to diverge from audit
standards for public companies due to new PCAOB issuances
c. The concern that private companies should be able to follow the same standards as
governmental entities
d. The concern that GAAP for private companies is not adequately converged with IFRS for
private companies - ANS The concern that GAAP is currently too complex and too costly for
private companies to apply
Which of the following was not a criticism of the early standard-setting boards, the CAP and
APB?
a. The boards moved too quickly, issuing guidance that was not sufficiently vetted
b. The boards lacked independence, because the members served in only part-time capacity
c. The boards did not have a common conceptual framework serving as a foundation for their
decisions
d. The boards did not respond to emerging issues in a timely manner - ANS The boards
moved too quickly, issuing guidance that was not sufficiently vetted
@2026 ALLRIGHTS RESERVED 2
,Which of the following reflects the correct chronological order of historical and current standard
setters?
a. The SEC was first granted authority, then the Committee on Accounting Procedure (CAP), then
the Accounting Principles Board (APB), and now the Financial Accounting Standards Board
(FASB)
b. APB then the SEC, then the CAP, and now FASB
c. SEC, then APB, then the CAP, and now FASB
d. CAP was first granted authority, then the SEC, then the APB, and now FASB - ANS The SEC
was first granted authority, then the Committee on Accounting Procedure (CAP), then the
Accounting Principles Board (APB), and now the Financial Accounting Standards Board (FASB)
Ideally, companies with sufficient resources will perform accounting research for a transaction
at which time?
a. After financial statements are issued
b. All of the answers are correct
c. At the time when, or after, a transaction occurs
d. Before a transaction occurs - ANS Before a transaction occurs
It may not always be possible to research the accounting for proposed transactions. Research
may be required at the time, or after, a transaction is executed if
@2026 ALLRIGHTS RESERVED 3
, a. Communication broke down between the accounting team and the operations team in the
organization, and the accounting team was not made aware of the proposed transaction
b. The transaction was time-sensitive, and there was not sufficient lead time to research the
account
c. The transaction or event could not have been anticipated, such as issues arising from a fire or
natural disaster
d. The preparer has limited resources and therefore only performs research for final
transactions
e. All of the answers are correct - ANS All of the answers are correct
Which of the following is NOT a benefit of researching a proposed transaction?
a. It allows investors to research a company's choice of accounting methods before the
transaction is finalized
b. The accounting team can prepare timely documentation of the expected accounting position
c. Researching a proposed transaction allows management to evaluate whether the expected
financial statements impacts of the transaction are acceptable
d. The audit team can review the proposed accounting position before the transaction is
recorded
@2026 ALLRIGHTS RESERVED 4
