CPA FAR Practice Test

CPA FAR Public Companies, Special Frameworks & Ratios Practice Questions

Public Companies, Special Frameworks & Ratios makes up 6 of every 50 questions on a Tigertest CPA FAR practice test. Here are 10 of the 24 questions on it, each with the answer and the reason.

Updated 2026-11-10 by the Tigertest team. Based on the AICPA's 2026 FAR blueprint. Original multiple-choice questions; simulations not included. Not affiliated with the AICPA or NASBA.

1. 1. A registrant files a Form 8-K with the SEC to report:

   • A.Proxy matters for the annual meeting
   • B.Material events between periodic reports
   • C.Annual audited financial statements
   • D.Quarterly unaudited statements

   Answer: B. Form 8-K is the current report for specified material events, such as an acquisition or a change in auditors. Annual reports go on Form 10-K and quarterly reports on Form 10-Q.

2. 2. Item 7 in Part II of Form 10-K contains:

   • A.Disclosures about market risk
   • B.Executive compensation tables
   • C.Financial statements and supplementary data
   • D.Management's discussion and analysis

   Answer: D. Part II Item 7 is MD&A. Item 7A covers quantitative and qualitative disclosures about market risk, and Item 8 holds the financial statements and supplementary data.

3. 3. Item 8 in Part II of Form 10-K contains:

   • A.Financial statements and supplementary data
   • B.A list of the company's properties
   • C.Management's discussion and analysis
   • D.Disclosures about market risk

   Answer: A. Item 8 holds the audited financial statements and supplementary data. MD&A is Item 7 and market risk disclosures are Item 7A.

4. 4. The financial statements in Part I of a Form 10-Q are:

   • A.Unaudited, with no auditor review
   • B.Audited for the fourth quarter only
   • C.Unaudited, reviewed by the auditor
   • D.Audited by the independent auditor

   Answer: C. Quarterly statements in a 10-Q are unaudited, but Regulation S-X requires an independent accountant to review them before filing. There is no 10-Q for the fourth quarter.

5. 5. A large accelerated filer must file its annual report on Form 10-K within:

   • A.90 days after fiscal year-end
   • B.45 days after fiscal year-end
   • C.60 days after fiscal year-end
   • D.75 days after fiscal year-end

   Answer: C. Form 10-K is due 60 days after year-end for large accelerated filers, 75 days for accelerated filers and 90 days for all others.

6. 6. A Form 8-K for most reportable events must be filed within:

   • A.Four business days
   • B.Two business days
   • C.Fifteen calendar days
   • D.Ten business days

   Answer: A. Most 8-K items are due within four business days after the event occurs.

7. 7. Net income is $500,000. Cumulative preferred dividends of $40,000 were declared this year and 100,000 common shares were outstanding all year. Basic earnings per share is:

   • A.$5.40
   • B.$5.00
   • C.$4.20
   • D.$4.60

   Answer: D. Basic EPS is income available to common shareholders over weighted shares: ($500,000 - $40,000) / 100,000 = $4.60. Ignoring the preferred dividends gives $5.00.

8. 8. A company had 120,000 common shares on January 1, issued 40,000 on April 1 and bought back 12,000 as treasury stock on October 1. Weighted average shares for the calendar year are:

   • A.160,000
   • B.147,000
   • C.148,000
   • D.150,000

   Answer: B. 120,000 + 40,000 x 9/12 - 12,000 x 3/12 = 120,000 + 30,000 - 3,000 = 147,000. 148,000 is the year-end count, which ignores timing.

9. 9. A company issues a 10% stock dividend in September. For weighted average shares, the new shares are:

   • A.Added to diluted shares only
   • B.Restated as of the earliest period
   • C.Weighted from the issue date
   • D.Ignored in the denominator

   Answer: B. Stock dividends and splits bring in no resources, so the shares are treated as outstanding from the start of the earliest period presented, and prior EPS is restated.

10. 10. Employees hold 10,000 options with an exercise price of $30. The average market price for the year is $40. Under the treasury stock method, incremental shares for diluted EPS are:

    • A.10,000
    • B.3,333
    • C.7,500
    • D.2,500

    Answer: D. Exercise brings in $300,000, which buys back $300,000 / $40 = 7,500 shares, so 10,000 - 7,500 = 2,500 incremental shares. 7,500 is the buyback, not the net increase.