AICPA Reading & Literacy Support 2

Question 1

When reading a complex financial statement footnote, which strategy best helps a CPA candidate identify the main point of a dense paragraph?

Accepted Answer

Identify subject-verb pairs in each sentence and discard modifying clauses first

Answer

Isolating subject-verb pairs strips away complexity and reveals the core claim of a dense sentence.

Question 2

A passage states: 'While revenue recognition under ASC 606 differs markedly from prior GAAP, the core principle—recognizing revenue to depict the transfer of goods or services—remains anchored in economics.' The word 'anchored' most nearly means:

Accepted Answer

Grounded

Answer

'Anchored' here means firmly grounded or rooted, indicating the principle is stable.

Question 3

Which of the following best describes an 'inference' in the context of reading a CPA exam passage?

Accepted Answer

A conclusion that goes beyond what is explicitly stated but is supported by evidence in the text

Answer

An inference requires using textual evidence to reach a conclusion the author implies but does not explicitly state.

Question 4

A CPA exam question asks you to identify the 'primary purpose' of a regulatory excerpt. Which approach is most effective?

Accepted Answer

Identify what problem or need the regulation is designed to address

Answer

Regulatory text is written to solve a problem or establish a standard, so identifying that purpose reveals the primary intent.

Question 5

In reading a PCAOB auditing standard, the phrase 'the auditor should consider' versus 'the auditor must' signals what type of distinction?

Accepted Answer

A difference between a required procedure and a professional judgment decision

Answer

'Must' denotes a mandatory requirement while 'should consider' grants professional judgment about whether a procedure is necessary.

(AICPA) Association of International Certified Professional Accountants Practice Test

(AICPA) Association of International Certified Professional Accountants Practice Test

AICPA Reading & Literacy Support 2