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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Which one of the following is an advantage of current purchasing power accounting?

A) It provides a stable monetary unit that values profit and capital.
B) It provides a clear use of indices which approximates the measurement of value.
C) It supposes that value of net assets clearly reflects general goods and services are bought once assets were released.
D) It enables raw data to be just easily verifiable but not auditable.

2. The ability of a company to pay its bills when and as they fall due is a measure of

A) the true and fair view of the financial report.
B) economic value.
C) solvency.
D) compliance with the conceptual framework.

3. LMN Ltd recently changed the measurement base for their assets. They should I)treat this like a change in an estimate.
II)treat this like a change in the accounting policy.
III)disclose this in the notes to financial statements.

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

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

5. An example of voluntary reporting in Australia is a

A) statement of financial position.
B) statement of comprehensive income.
C) statement of cash flows.
D) sustainability report.

Solutions: