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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. The accounting policies used by companies must result in financial reports that are

A) comparable with previous years' reports.
B) signed by the CEO or equivalent.
C) independently audited.
D) easy to read.

2. Liquidity of a company is based on its ability to

A) pay dividends to shareholders.
B) buy back shares.
C) meet long term commitments.
D) meet short term commitments.

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

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

4. 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 enable the national government to control activities of foreign multinationals
D) to increase foreign investors' understanding of local financial reports

5. Which one of the following is a benefit of developing financial reporting standards using a conceptual framework?

A) The interpretation of financial reporting standards by anybody would be easy.
B) A financial reporting environment based on standardised principles would be created.
C) The interpretation of non-financial information is made easier.
D) The financial statements based on these standards would be error-free.

Solutions: