CPA EXAM (MAINE BOARD OF ACCOUNTANCY) – QUESTIONS AND ANSWERS |
VERIFIED AND WELL DETAILED ANSWERS | PLUS RATIONALES | GUARANTEED PASS |
LATEST EXAM UPDATE
*CORE DOMAINS*
Financial Accounting and Reporting (FAR)
Auditing and Attestation (AUD)
Regulation (REG)
Business Analysis and Reporting Concepts
Ethics and Professional Responsibilities
Corporate Governance
Federal Taxation
Risk Assessment and Internal Controls
Professional Standards (AICPA Codification)
*INTRODUCTION*
,
SECTION ONE: QUESTIONS 1–50
Question 1
Which financial statement shows a company’s financial position at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
🟢 Correct Answer: C. Balance Sheet
🔴 Explanation: The balance sheet reports assets, liabilities, and equity at a specific point
in time.
Question 2
What is the primary objective of an external audit?
,A. Detect all fraud
B. Provide tax advice
C. Express an opinion on financial statements
D. Prepare financial statements
🟢 Correct Answer: C. Express an opinion on financial statements
🔴 Explanation: Auditors provide reasonable assurance on fairness of financial reporting.
Question 3
Which principle requires expenses to be matched with revenues?
A. Revenue recognition principle
B. Matching principle
C. Cost principle
D. Full disclosure principle
🟢 Correct Answer: B. Matching principle
🔴 Explanation: Expenses are recorded in the same period as related revenues.
, Question 4
Which control is most effective in preventing unauthorized transactions?
A. Bank reconciliation
B. Segregation of duties
C. Trial balance review
D. Budget variance analysis
🟢 Correct Answer: B. Segregation of duties
🔴 Explanation: Separating authorization, recording, and custody reduces fraud risk.
Question 5
Depreciation is best defined as:
A. Market value reduction
B. Allocation of asset cost over useful life
C. Cash outflow reduction
D. Replacement cost
🟢 Correct Answer: B. Allocation of asset cost over useful life
🔴 Explanation: Depreciation systematically spreads asset cost over time.
VERIFIED AND WELL DETAILED ANSWERS | PLUS RATIONALES | GUARANTEED PASS |
LATEST EXAM UPDATE
*CORE DOMAINS*
Financial Accounting and Reporting (FAR)
Auditing and Attestation (AUD)
Regulation (REG)
Business Analysis and Reporting Concepts
Ethics and Professional Responsibilities
Corporate Governance
Federal Taxation
Risk Assessment and Internal Controls
Professional Standards (AICPA Codification)
*INTRODUCTION*
,
SECTION ONE: QUESTIONS 1–50
Question 1
Which financial statement shows a company’s financial position at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
🟢 Correct Answer: C. Balance Sheet
🔴 Explanation: The balance sheet reports assets, liabilities, and equity at a specific point
in time.
Question 2
What is the primary objective of an external audit?
,A. Detect all fraud
B. Provide tax advice
C. Express an opinion on financial statements
D. Prepare financial statements
🟢 Correct Answer: C. Express an opinion on financial statements
🔴 Explanation: Auditors provide reasonable assurance on fairness of financial reporting.
Question 3
Which principle requires expenses to be matched with revenues?
A. Revenue recognition principle
B. Matching principle
C. Cost principle
D. Full disclosure principle
🟢 Correct Answer: B. Matching principle
🔴 Explanation: Expenses are recorded in the same period as related revenues.
, Question 4
Which control is most effective in preventing unauthorized transactions?
A. Bank reconciliation
B. Segregation of duties
C. Trial balance review
D. Budget variance analysis
🟢 Correct Answer: B. Segregation of duties
🔴 Explanation: Separating authorization, recording, and custody reduces fraud risk.
Question 5
Depreciation is best defined as:
A. Market value reduction
B. Allocation of asset cost over useful life
C. Cash outflow reduction
D. Replacement cost
🟢 Correct Answer: B. Allocation of asset cost over useful life
🔴 Explanation: Depreciation systematically spreads asset cost over time.
