Test your FAR knowledge with free CPA practice questions and explanations covering revenue recognition, assets, liabilities, equity and financial reporting. Start below or play CPArcade’s Daily Challenge for a five-question mixed practice session.
These are real CPArcade questions pulled from the current question bank. Use them to test yourself before jumping into the Daily Challenge or Full Game.
Correct answer: A. Relevance and faithful representation
Relevance and faithful representation are fundamental. Comparability, verifiability, timeliness and understandability are enhancing characteristics, useful but secondary.
Correct answer: C. The lower of cost or net realizable value
ASC 330 requires inventory at the lower of cost or net realizable value (LCNRV). If NRV falls below cost, inventory is written down. It is never written up above cost under GAAP.
Correct answer: C. Bonds payable maturing in 3 years
Current liabilities settle within one year or the operating cycle. Bonds maturing in 3 years are long-term, they become current only when maturity is within one year.
Correct answer: C. Payment of dividends to shareholders
Financing activities involve transactions with owners and creditors, including paying dividends. Equipment purchases are investing; AR collection and taxes are operating.
Correct answer: B. Two, with and without donor restrictions
ASC 958 uses two net asset classes: with and without donor restrictions. The old three-class model was eliminated by ASU 2016-14.
Try the Daily Challenge for a quick mixed session or unlock Full Game for unlimited matches.
Use these topic areas to decide what to review next.
Review qualitative characteristics, recognition rules and revenue prompts.
Work through inventory, receivables, PPE, impairments and other asset questions.
Review bonds, leases, contingencies, equity transactions and related journal-entry logic.
Build confidence with cash flows, reporting presentation and financial statement analysis.