CPA FAR: Revenue recognition, lessee accounting and income taxes
Blueprint III.C, III.D, III.F · Area III, Select Transactions · 25–35% of FAR
Ten FAR questions on revenue recognition, lessee accounting and income taxes, untimed, with a reason for every answer option.
Or take the full FAR mock examAn online travel site arranges hotel stays. The hotel sets prices and is responsible for providing the room; the site never controls the rooms before the guest uses them and earns a 15% commission. How does the site report revenue?
Revenue recognition, lessee accounting and income taxes on CPA FAR
Area III of FAR (25–35%) covers select transactions. Three of the heaviest are revenue under ASC 606, lessee accounting under ASC 842 and accounting for income taxes under ASC 740.
- Blueprint groups
- III.C, III.D, III.F
- Share of the section
- Area III, Select Transactions: 25–35%
- Our drill
- 10 questions from 11 on this topic, untimed, with a reason for every option; one free attempt, unlimited with a pass
What to know
- Revenue follows five steps: identify the contract, identify performance obligations, determine the transaction price, allocate it on relative standalone selling prices, and recognize revenue as each obligation is satisfied (ASC 606-10-05-4).
- Variable consideration is included only to the extent it is probable that a significant revenue reversal will not occur (ASC 606-10-32-11).
- An entity that does not control the good or service before transfer is an agent and reports revenue net (ASC 606-10-55-36 to 55-40).
- A lessee recognizes a right-of-use asset and lease liability for leases longer than 12 months; operating leases produce a single straight-line lease cost, finance leases produce interest plus amortization (ASC 842-20-25-1, 25-5 and 25-6).
- Deferred taxes = temporary differences × enacted future rate; permanent differences such as municipal bond interest and fines create no deferred tax (ASC 740-10-30-2).
- A valuation allowance reduces deferred tax assets when it is more likely than not that some portion will not be realized (ASC 740-10-30-5).
Test yourself on revenue recognition, lessee accounting and income taxes
Ten FAR questions on revenue recognition, lessee accounting and income taxes, untimed, with a reason for every answer option.
Or take the full FAR mock examCommon questions
How much of the FAR section is revenue recognition, lessee accounting and income taxes?
It sits in Blueprint Area III (III.C, III.D, III.F). The AICPA weights whole areas, not single topics; see the area’s range on the FAR page. Our 50-question mock draws each area at the middle of its range.
Are these real FAR questions?
No. The AICPA does not release live exam questions. These are original practice questions written to the published 2027 CPA Exam Blueprints, with a reason for every answer option and the standard or code section behind the key.
More FAR topics
- Financial statements, disclosures and ratiosdrill
- Not-for-profit and government reportingdrill
- Cash, receivables, inventory, PP&E, intangibles and investmentsdrill
- Payables, debt and equitydrill
- Accounting changes, contingencies, fair value and subsequent eventsdrill
FAR full mock exam: 4 hours, 5 testletsFAR task-based simulations
Blueprint and exam facts checked November 2026: AICPA: Learn what is tested on the CPA Exam (Blueprints effective January 1, 2027) · AICPA: CPA Exam score release and testing windows · NASBA: CPA Exam FAQ · Virginia Board of Accountancy: CPA Exam fees.
Original independent practice questions written to the AICPA CPA Exam Blueprints. Not affiliated with or endorsed by the AICPA or NASBA.