Financial-Accounting-and-Reporting Exam Training Practice Tests (CPA Australia CPA Financial Accounting and Reporting)]

Question 1

Which one of the following countries has the view that Generally Accepted Accounting Principles (GAAP) refers to accounting practices which are regarded as permissible by the accounting profession?

A. United Kingdom B. Australia C. United States of America D. Canada

Correct Answer: A

Question 2

The use of the principle of substance over form is found in which one of the following accounting treatments?

A. accounting for finance leases B. accounting for inventories C. accounting for property, plant and equipment D. accounting for non-current assets

Correct Answer: A

Question 3

Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?

A. semi-strong form efficiency B. strong form efficiency C. allocative efficiency D. information processing efficiency

Correct Answer: B

Question 4

Which one of the following statements is not correct in respect of manual accounting systems?

A. It is easy to make corrections. B. Productivity in manual systems is lower than computer systems. C. Risk of error is greater and the quality of outputs is inferior. D. They are bulky to store compared to computer systems.

Correct Answer: A

Question 5

A statement of generally accepted theoretical principles which form the frame of reference for financial reporting refers to the

A. Regulatory Framework. B. International Financial Reporting Standards. C. Generally Accepted Accounting Principles. D. Conceptual Framework.

Correct Answer: D

Question 6

According to the IASB's Conceptual Framework, the key reason general purpose financial statements are produced is to satisfy the information needs of

A. capital providers. B. management. C. internal users. D. employees.

Correct Answer: A

Question 7

You assumed the role as the Chairperson of the Board of Directors of Daylight Ltd. As you start to write your first directors' report, which one of the following areas are you not required to include in your report?

A. Details of any dividends paid or proposed. B. Details regarding accounting policies pursued by Daylight in preparation of its financial statements. C. Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight. D. Details regarding any significant changes to Daylight's state of affairs for the year that just ended.

Correct Answer: B

Question 8

Which one of these is a key principle of good corporate governance?

A. non-disclosure of directors' agency relationship with the company B. restriction of shareholders' rights in decision-making C. effective communication with shareholders D. effective management of the employees of the company

Correct Answer: C

Question 9

According to the Australian Accounting Standards Board, which one of the following is a benefit of adopting International Financial Reporting Standards (IFRSs)?

A. to enable the national government to control activities of foreign multinationals B. to become a resource for developing nations who can easily adopt IFRSs as a full set of standards C. to make it easier for tax authorities to calculate taxes on investors' overseas income D. to increase foreign investors' understanding of local financial reports

Correct Answer: D

Question 10

Generally accepted accounting practice recognises revenue when

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

Correct Answer: C

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