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

2. In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of

A) national company law, national accounting standards and local stock exchange requirements.
B) company law, accounting standards, local stock exchange requirements and international accounting standards.
C) national company law and national accounting standards.
D) national company law and local stock exchange requirements.

3. 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) II and III only
B) I and IV only
C) I and III only
D) III and IV only

4. 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) various management accounting reports.
C) the annual financial report.
D) financial statements as specified by IAS 1 Presentation of Financial Statements.

5. The International Federation of Accountants (IFAC) was established by

A) the United Nations.
B) the International Accounting Standards Board.
C) various professional accounting bodies.
D) the Organization for Economic Co-operation & Development.

Solutions: