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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. 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) II, III and IV only
B) I, II and IV only
C) I, III and IV only
D) I, II and III only

2. 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.

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

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

4. According to the IASB Conceptual Framework, income is an increase in economic benefits in the form of I)inflows.
II)decreases of liabilities.
III)enhancements of assets.
IV)contributions from equity holders.

A) II, III and IV only
B) I, II and IV only
C) I, III and IV only
D) I, II and III only

5. Which one of the following would be included in the statement of financial position?

A) deferred tax
B) gains on property valuations
C) distribution costs
D) depreciation

Solutions: