Financial-Accounting-and-Reporting by CPA Australia Actual Free Exam Q&As

Question 1

In relation to financial statements, the 'true and fair override' indicates that

A. departure is allowed from accounting standards under specific instances to show a fair presentation. B. accounting standards must be complied with under all circumstances. C. the true and fair requirement need not be complied with by certain industries. D. statements need not always be true and accurate.

Discussion 0

Correct Answer: A Vote an answer

Question 2

Which one of these concepts suggests that stock prices react to new information almost instantly?

A. market power B. efficient market C. bargaining power D. incentive substitution

Discussion 0

Correct Answer: B Vote an answer

Question 3

The two fundamental qualitative characteristics of the financial information are

A. relevance and faithful representation. B. relevance and comparability. C. faithful representation and comparability. D. verifiability and relevance.

Discussion 0

Correct Answer: A Vote an answer

Question 4

Which one of the following reports sets out how directors have run a company and if they implemented proper procedures to deal with matters like accountability, audits, directors' roles and responsibilities, internal controls and relations with shareholders?

A. corporate social responsibility report B. chairman's statement C. director's report D. corporate governance statement

Discussion 0

Correct Answer: D Vote an answer

Question 5

Generally accepted accounting practice recognises revenue when

A. goods are dispatched to the customer. B. customers order goods. C. cash is received for the goods. D. goods are produced.

Discussion 0

Correct Answer: A Vote an answer

Question 6

Which one of the following methods is not used for 'creative accounting'?

A. aggressive debt management B. window dressing C. off balance sheet financing D. profit smoothing

Discussion 0

Correct Answer: A Vote an answer

Question 7

The body that is part of the international standard-setting framework reporting to the International Financial Reporting Standards Foundation (IFRS Foundation) is the

A. International Accounting Standards Board. B. Centre on Transnational Corporations. C. International Accounting Board. D. International Accounting Standards Committee.

Discussion 0

Correct Answer: A Vote an answer

Question 8

Investors use the audited financial statements of a company to
I)evaluate the company's current return on assets
II)predict the company's market conditions for future years.
III)predict the company's market conditions for future years.
IV)make a judgement on the liquidity and solvency of the company.

A. III and IV only B. II and III only C. I and IV only D. I and III only

Discussion 0

Correct Answer: C Vote an answer

Question 9

Which one of the following financial statements helps provide information about factors that might affect an entity's liquidity or solvency?

A. statement of cash flows B. statement of changes in equity C. statement of profit or loss and other comprehensive income D. notes to the financial statements

Discussion 0

Correct Answer: A Vote an answer

Question 10

The International Federation of Accountants (IFAC) was established by

A. the Organization for Economic Co-operation & Development. B. various professional accounting bodies. C. the United Nations. D. the International Accounting Standards Board.

Discussion 0

Correct Answer: B Vote an answer

CPA Australia CPA Financial Accounting and Reporting - Financial-Accounting-and-Reporting Exam Practice Test