CPA Australia CPA Foundation Program Financial-Accounting-and-Reporting

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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Generally accepted accounting practice recognises revenue when

A) goods are produced.
B) customers order goods.
C) cash is received for the goods.
D) goods are dispatched to the customer.

2. As per the International Accounting Standards Board conceptual framework, which of the following holds the primary responsibility for preparing and presenting financial statements?
I)owners
II)auditors
III)directors

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

3. You assumed the role as the Chairperson of the Board of Directors of Daylight Ltd. As you start to write your first directors' report, which one of the following areas are you not required to include in your report?

A) Details regarding accounting policies pursued by Daylight in preparation of its financial statements.
B) Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.
C) Details of any dividends paid or proposed.
D) Details regarding any significant changes to Daylight's state of affairs for the year that just ended.

4. The International Accounting Standards Board's Conceptual Framework for Financial Reporting for the preparation and presentation of financial statements is concerned with the information needs of most users, but not for each possible user.
Which one of the following stakeholders would not be one of the users that the Conceptual Framework is concerned about?

A) members of the public who have small investment holdings in the company
B) potential investors in the company
C) a company's executive management
D) governments and regulatory bodies

5. What is the difference between positive and normative accounting theories?

A) Normative accounting theory specifies the prediction rules for items.
B) Positive accounting theory explains what should occur.
C) Normative accounting theory explains what should occur instead of predicting what is expected to occur.
D) Normative accounting theory predicts what is expected to occur rather than explaining what should occur.

Solutions: