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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. 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) general accounting theory
B) historical cost accounting theory
C) normative accounting theory
D) positive accounting theory

2. 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) Statement of cash flows
B) Auditor's Report
C) Corporate Governance Statement
D) Director's Report

3. A statement of generally accepted theoretical principles which form the frame of reference for financial reporting refers to the

A) Regulatory Framework.
B) International Financial Reporting Standards.
C) Generally Accepted Accounting Principles.
D) Conceptual Framework.

4. Which one of the following is not an advantage of accounting regulation?

A) It provides flexibility in the way accounting information is presented to users.
B) It provides the required accounting information to all necessary shareholders.
C) It provides quality of information in and across financial statements.
D) It instils public confidence in the accounting system employed in commerce and industry.

5. Financial markets have achieved operational efficiency when

A) the price of stocks and shares are available accurately and quickly.
B) the cost of transactions is a reflection of the actual cost incurred.
C) the costs of financial transactions are kept as low as possible.
D) past records are used to predict the future prices of goods.

Solutions: