Latest CPA Australia Financial-Accounting-and-Reporting Practice Test Questions, CPA Financial Accounting and Reporting Exam Exam Dumps
Mar-2023 Pass CPA Australia Financial-Accounting-and-Reporting Exam in First Attempt Easily
NEW QUESTION 27
LMN Ltd recently changed the measurement base for their assets. They should I)treat this like a change in an estimate.
II)treat this like a change in the accounting policy.
III)disclose this in the notes to financial statements.
- A. III only
- B. I and III only
- C. I only
- D. II and III only
Answer: D
NEW QUESTION 28
The IASB evaluates the merits of adding a potential item to its agenda mainly by reference to the needs of
- A. regulatory authorities.
- B. suppliers.
- C. tax agencies.
- D. investors.
Answer: D
NEW QUESTION 29
When business managers seek detailed information about the profitability or efficiency of different parts of their operations, they would find the most useful information in
- A. the company's accounting policies.
- B. the annual financial report.
- C. financial statements as specified by IAS 1 Presentation of Financial Statements.
- D. various management accounting reports.
Answer: D
NEW QUESTION 30
Which one of the following statements is correct about using judgement in the financial reporting process?
- A. Use of individual judgement is required to choose between alternative methods available within accounting standards.
- B. Accountants should not be allowed to use their own judgement.
- C. A true and fair view cannot be assured if individual judgement is allowed.
- D. Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.
Answer: A
NEW QUESTION 31
Restrictions on the scope of a specific accounting standard are stated in
- A. the IASB's Conceptual Framework.
- B. various Statements of Accounting Concepts (SACs) issued by the AASB.
- C. that specific standard.
- D. the explanatory materials provided by the AASB.
Answer: C
NEW QUESTION 32
Financial information is reliable if it
I)prefers substance over legal form.
II)is neutral and without any material error.
III)is complete and has been made with prudence.
IV)is understandable to those with no knowledge of accounting.
- A. I, II and III only
- B. I, III and IV only
- C. I, II and IV only
- D. II, III and IV only
Answer: A
NEW QUESTION 33
The accounting policies used by companies must result in financial reports that are
- A. easy to read.
- B. signed by the CEO or equivalent.
- C. independently audited.
- D. comparable with previous years' reports.
Answer: D
NEW QUESTION 34
The ability of a company to pay its bills when and as they fall due is a measure of
- A. solvency.
- B. economic value.
- C. the true and fair view of the financial report.
- D. compliance with the conceptual framework.
Answer: A
NEW QUESTION 35
Which one of the following is an objective of the International Federation of Accountants (IFAC)?
- A. to provide advice on accounting standards to the OECD
- B. to issue new international financial reporting standards (IFRS)
- C. to provide direction to the Financial Accounting Standards Board (FASB)
- D. to establish high quality professional standards in accountancy
Answer: D
NEW QUESTION 36
XYZ Ltd is listed on the Australian Securities Exchange (ASX). Which one of the following reports is the company required to prepare as a part of its annual financial report?
- A. management commentary
- B. sustainability report
- C. chairman's statement
- D. corporate governance statement
Answer: D
NEW QUESTION 37
Which one of the following would be recognised in the statement of profit or loss and other comprehensive income?
- A. inventory
- B. retained earnings
- C. employee wages
- D. prepayment of expenses
Answer: C
NEW QUESTION 38
A decision has been made to change the value of a major non-current asset, upon which depreciation is based, from original cost to a revalued amount. This results in a change in
- A. measurement basis and must be disclosed.
- B. accounting estimate and does not need to be disclosed.
- C. accounting estimate and must be disclosed.
- D. measurement basis and does not need to be disclosed.
Answer: A
NEW QUESTION 39
Which accounting theory is best described by the statement 'An approach to accounting is one where a theory is thought of as a body of knowledge that explains and attempts to predict actual accounting practice'?
- A. historical cost accounting theory
- B. normative accounting theory
- C. positive accounting theory
- D. general accounting theory
Answer: C
NEW QUESTION 40
PLO Advertising Ltd (PLO) buys a new stretch limousine for $40 000. A number of individuals have expressed an interest in buying the limousine from PLO for $60 000. The board members decide that the limousine is worth between $65 000 and $70 000. What is the fair value of the limousine?
- A. $60 000
- B. $40 000
- C. $65 000
- D. $70 000
Answer: A
NEW QUESTION 41
Which one of the following statements is correct?
- A. Accounting standards prescribe the possible accounting treatments.
- B. Accounting standards are developed and maintained using a consultative process with the OECD.
- C. Accounting standards provide the basic knowledge upon which the conceptual framework is developed.
- D. Australian accounting standards are based on the US GAAP.
Answer: A
NEW QUESTION 42
To be relevant, financial information has to
I)be provided in a timely manner.
II)comply with the going concern assumption.
III)have predictive and/or confirmatory value.
IV)exclude computations that are difficult to understand.
- A. III and IV only
- B. I and II only
- C. I and III only
- D. II and III only
Answer: C
NEW QUESTION 43
Which one of the following shows whether the financial statements of a company show a true and fair presentation of the financial performance of the company?
- A. Auditor's Report
- B. Corporate Governance Statement
- C. Statement of cash flows
- D. Director's Report
Answer: A
NEW QUESTION 44
Which one of the following statements is not correct in respect of manual accounting systems?
- A. It is easy to make corrections.
- B. Risk of error is greater and the quality of outputs is inferior.
- C. Productivity in manual systems is lower than computer systems.
- D. They are bulky to store compared to computer systems.
Answer: A
NEW QUESTION 45
X was influenced by G Co's audit report and dividend declaration, and decided to invest in the securities of the company. What should X be cautious about before investing in the shares of the company?
X should be aware that
- A. the declaration of dividends assures high earnings per share.
- B. the auditor's report refers to the company's prior year financials.
- C. a declaration of dividend is the ultimate measure of a company's profitability.
- D. the auditor's report is influenced by the directors.
Answer: B
NEW QUESTION 46
Which one of the following practices is not considered creative accounting?
- A. profit smoothing
- B. window dressing
- C. trading in derivatives
- D. aggressive earnings management
Answer: C
NEW QUESTION 47
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. I and III only
- B. III and IV only
- C. I and IV only
- D. II and III only
Answer: C
NEW QUESTION 48
Current cost accounting reflects an approach to capital maintenance based on maintaining which one of the following?
- A. operating capability of the business
- B. profitability of the business
- C. financial capability of the business
- D. cost of assets in the business
Answer: A
NEW QUESTION 49
Financial managers will benefit in a strongly efficient market by
- A. having their shareholders be tolerant of low profits if higher profits are expected in the future.
- B. having their shareholders invest more money into expanding the company's operations.
- C. being able to take more risks without shareholders' consent.
- D. being able to decide what information needs to be made available to shareholders.
Answer: A
NEW QUESTION 50
Which one of the following describes the key advantage of the manual system of accounting?
- A. The quality of output is not necessarily an issue.
- B. Processing is maintained at a reasonable speed even while dealing with large volumes of data.
- C. Corrections are easily managed as updating or recreating the whole document is not difficult.
- D. A thorough understanding of the business can be gained through it.
Answer: D
NEW QUESTION 51
In the context of a regulatory framework, a principles-based system
- A. is a rule-driven approach.
- B. provides a theoretical basis with broad terms of reference.
- C. attempts to cover specific eventualities.
- D. removes any element of judgement by providing clear requirements.
Answer: B
NEW QUESTION 52
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