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CPA Australia Financial-Accounting-and-Reporting Exam Syllabus Topics:

CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Which of the following statements are correct in the context of accounting concepts and principles?
I)The going concern assumption requires that assets be carried at their cost values.
II)Prudence allows the creation of contingency reserves and more generous provisions.
III)Financial information is considered complete even if it excludes non-material information.
IV)Understandability does not require complex information to be excluded from financial reports.

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

2. To be relevant, financial information has to
I)be provided in a timely manner.
II)comply with the going concern assumption.
III)have predictive and/or confirmatory value.
IV)exclude computations that are difficult to understand.

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

3. Which one of the following methods is not used for 'creative accounting'?

A) off balance sheet financing
B) window dressing
C) aggressive debt management
D) profit smoothing

4. A multinational company is converting the methodology of reporting by its subsidiaries in various countries to make it uniform with the requirements of the International Financial Reporting Standards (IFRS). While changing the reporting methodologies, accountants have to apply certain judgments.
Which one of the following is not a valid motivation for decision making on reporting methodologies?

A) to present the financial statements in a manner that is understood by most users
B) to present the company's financial performance in the most favourable way
C) to comply with the information demands of government bodies in home country
D) to be consistent with the methodologies followed in the home country of the company

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

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

Solutions: