Which of the Following Should Be Disclosed in the Summary of Significant Accounting Policies?
Here’s your college CPA Exam question for the day. Which of the following should be disclosed in the Summary of Significant Accounting Policies?
A. Rent Expense Amount.
B. Maturity dates of Long Term Debt.
C. Methods of Amortizing Intangibles.
D. Composition of Plant Assets.
The Answer is C. Methods of Amortizing Intangibles.
The reasoning here for the correct answer is that ASC Topic 235 recommends that when financial statements are issued, a statement identifying the accounting policies adopted and followed by the reporting entity should be presented as an integral part of the financial statements. The accounting policies are the specific accounting principles and methods themselves of applying the principles that have been adopted for preparing the financial statements.
In essence, the amortizing intangibles method is the only one on this list that even comes close to an accounting policy disclosure.
Follow and subscribe for more CPA Exam question explanations, this one was for the FAR CPA exam section.
Disclaimer: The opinions and documentation contained within this article and on this blog are the sole property of inflationhedging.com and are not to be copyrighted or reproduced in any manner, else legal action within the rights of the United States legal code could be use to obtain recompense. All articles and blog posts are the sole opinions of the writers of the blog, and are not necessarily in line with what exactly will work for you, you should consult a CPA, Tax Professional, or Financial Professional to determine what exact financial needs are in line with your interests. Also, from time to time, certain links on this website will be used to generate affiliate commissions, in order to support the health and growth of our website, health and business.