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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Which one of the following describes the key advantage of the manual system of accounting?

A) Processing is maintained at a reasonable speed even while dealing with large volumes of data.
B) A thorough understanding of the business can be gained through it.
C) Corrections are easily managed as updating or recreating the whole document is not difficult.
D) The quality of output is not necessarily an issue.

2. Which one of the following would be included in a statement of financial position?

A) retained earnings
B) cost of sales
C) proceeds from long term borrowings
D) finance costs

3. The two fundamental qualitative characteristics of the financial information are

A) faithful representation and comparability.
B) verifiability and relevance.
C) relevance and comparability.
D) relevance and faithful representation.

4. Which one of these is a disadvantage of a conceptual framework?

A) It increases the chances of political interference in the development of accounting standards.
B) It mandates the formats of various financial statements.
C) A single framework is not suitable for all users of financial statements.
D) It replaces the established principles.

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

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

Solutions: