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Financial-Accounting-and-Reporting Actual Questions – Instant Download 100 Questions

The CPA Financial Accounting and Reporting exam is a globally recognized certification that is highly valued by employers in the accounting and finance industry. It is designed for professionals who want to advance their careers in accounting, finance, or related fields. Financial-Accounting-and-Reporting exam is a rigorous test of knowledge and skills, and candidates must be well prepared in order to pass. Financial-Accounting-and-Reporting exam is administered by CPA Australia, a professional accounting body that is recognized globally for its high standards of education and training.

NO.44 Which one of the following would be recognised in the statement of profit or loss and other comprehensive income?

inventory

employee wages

retained earnings

prepayment of expenses

NO.45 Which one of the following parties provides information to ensure that the financial statements show a true and fair view?

shareholders

tax consultants

financial Institutions

directors of the company

NO.46 The International Federation of Accountants (IFAC) was established by

the United Nations.

various professional accounting bodies.

the International Accounting Standards Board.

the Organization for Economic Co-operation & Development.

NO.47 Which one of the following describes the key advantage of the manual system of accounting?

The quality of output is not necessarily an issue.

A thorough understanding of the business can be gained through it.

Corrections are easily managed as updating or recreating the whole document is not difficult.

Processing is maintained at a reasonable speed even while dealing with large volumes of data.

NO.48 Which one of the following bodies makes accounting standards in Australia?

ASIC

FRC

IASB

AASB

NO.49 Which one of the following statements is correct about using judgement in the financial reporting process?

Accountants should not be allowed to use their own judgement.

A true and fair view cannot be assured if individual judgement is allowed.

Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.

Use of individual judgement is required to choose between alternative methods available within accounting standards.

NO.50 Which one of the following financial statements helps provide information about factors that might affect an entity’s liquidity or solvency?

statement of cash flows

statement of changes in equity

notes to the financial statements

statement of profit or loss and other comprehensive income

NO.51 The accounting policies used by companies must result in financial reports that are

easy to read.

independently audited.

signed by the CEO or equivalent.

comparable with previous years’ reports.

NO.52 Which one of the following statements is not correct in respect of manual accounting systems?

It is easy to make corrections.

They are bulky to store compared to computer systems.

Risk of error is greater and the quality of outputs is inferior.

Productivity in manual systems is lower than computer systems.

NO.53 A company sold some old operating equipment from its factory. After depreciation was accounted for, a small gain on sale was recorded. According to the revised IAS 1 Presentation of Financial Statements, this transaction will be shown as a separate item ‘gain on sale of equipment’. This item will be shown in the statement of

cash flow.

financial position.

changes in equity.

comprehensive income.

NO.54 According to the IASB’s Conceptual Framework, the key reason general purpose financial statements are produced is to satisfy the information needs of

employees.

management.

internal users.

capital providers.

NO.55 Which one of the following situations would result in either a new liability being recognised or an existing liability being increased?

A company pays only half of an overdue invoice.

A company establishes an asset revaluation reserve.

At the end of the reporting period, there are unpaid wages.

A company recognises the depreciation expense for the current period.

NO.56 A company’s financial report is compliant with International Financial Reporting Standards. Where in the report would an investor find the amount of money received by the company for investment activities?

statement of cash flows

statement of financial position

statement of changes in equity

statement of comprehensive income

NO.57 Which one of the following bases of measurement is used to implement an approach to capital maintenance based on maintaining the operating capability of a business?

fair value

current value

deprival value

current purchasing power

NO.58 The concept of transparency in corporate governance means that listed companies should disclose

their future strategy.

confidential issues relating to competitors.

material information that affects decisions.

only mandatory information by management.

NO.59 The body that is part of the international standard-setting framework reporting to the International Financial Reporting Standards Foundation (IFRS Foundation) is the

International Accounting Board.

Centre on Transnational Corporations.

International Accounting Standards Board.

International Accounting Standards Committee.

NO.60 Which one of these concepts suggests that stock prices react to new information almost instantly?

market power

efficient market

bargaining power

incentive substitution

NO.61 In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of

national company law and national accounting standards.

national company law and local stock exchange requirements.

national company law, national accounting standards and local stock exchange requirements.

company law, accounting standards, local stock exchange requirements and international accounting standards.

NO.62 Which of the following are the stated objectives of the International Accounting Standards Board (IASB)?
I)Enforce accounting standards.
II)Develop accounting standards.
III)Work for convergence of accounting standards.

I only

I and II only

II and III only

III only

NO.63 Which one of the following is not an advantage of accounting regulation?

It provides quality of information in and across financial statements.

It provides flexibility in the way accounting information is presented to users.

It provides the required accounting information to all necessary shareholders.

It instils public confidence in the accounting system employed in commerce and industry.

NO.64 Which one of the following statements is correct?

Liabilities are future obligations that will cause outflow of resources embodying economic benefits.

Current and non-current assets are shown as separate classifications in the statement of financial position.

Assets used for long-term operations are shown under working capital in the statement of financial position.

A statement of financial position explains the reasons for movement of assets and liabilities through the accounting period.

NO.65 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’?

general accounting theory

positive accounting theory

normative accounting theory

historical cost accounting theory

NO.66 A decrease in assets is most likely to be recognised in the financial report as

a liability.

an expense.

revenue earned.

a change in equity.

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