CPA Australia Financial-Accounting-and-Reporting Dumps Updated Nov 17, 2023 WIith 100 Questions
View All Financial-Accounting-and-Reporting Actual Free Exam Questions Nov 17, 2023 Updated
NEW QUESTION # 34
JK Ltd intentionally over-valued its closing inventories to increase profitability for the year 20X8. This would help them to better price a planned share issue in 20X9. By doing this they have breached the concept of
- A. substance over form.
- B. completeness.
- C. understandability.
- D. neutrality.
Answer: D
NEW QUESTION # 35
The objective of the International Accounting Standards Board (IASB) is to
- A. enforce International Financial Reporting Standards.
- B. provide strategic advice to the International Financial Reporting Standards Advisory Council.
- C. set International Financial Reporting Standards.
- D. oversee the standard setting process and International Financial Reporting Standards Advisory Council.
Answer: C
NEW QUESTION # 36
Which one of the following situations would result in either a new liability being recognised or an existing liability being increased?
- A. A company recognises the depreciation expense for the current period.
- B. At the end of the reporting period, there are unpaid wages.
- C. A company establishes an asset revaluation reserve.
- D. A company pays only half of an overdue invoice.
Answer: B
NEW QUESTION # 37
Investors use the audited financial statements of a company to
I)evaluate the company's current return on assets
II)predict the company's market conditions for future years.
III)predict the company's market conditions for future years.
IV)make a judgement on the liquidity and solvency of the company.
- A. I and IV only
- B. II and III only
- C. I and III only
- D. III and IV only
Answer: A
NEW QUESTION # 38
Which one of these is a disadvantage of a conceptual framework?
- A. It replaces the established principles.
- B. It increases the chances of political interference in the development of accounting standards.
- C. It mandates the formats of various financial statements.
- D. A single framework is not suitable for all users of financial statements.
Answer: D
NEW QUESTION # 39
A statement of generally accepted theoretical principles which form the frame of reference for financial reporting refers to the
- A. Conceptual Framework.
- B. International Financial Reporting Standards.
- C. Generally Accepted Accounting Principles.
- D. Regulatory Framework.
Answer: A
NEW QUESTION # 40
Current cost accounting reflects an approach to capital maintenance based on maintaining which one of the following?
- A. profitability of the business
- B. operating capability of the business
- C. cost of assets in the business
- D. financial capability of the business
Answer: B
NEW QUESTION # 41
The chairperson of XYZ Company is concerned about the readability of the annual financial report that is about to be published on its website. XYZ Company is obliged to comply with International Financial Reporting Standards, and the report contains all of the required financial statements, the auditor's report, corporate governance statements, declarations of accounting policy, explanatory notes and a section that addresses the company's corporate social responsibility program.
The chairperson is wondering whether the report can be condensed. The issue that is concerning the chairperson is known as
- A. the agency costs of monitoring.
- B. the cost of compliance.
- C. the costs of social responsibility reporting.
- D. information overload.
Answer: D
NEW QUESTION # 42
Which one of the following practices is not considered creative accounting?
- A. aggressive earnings management
- B. profit smoothing
- C. window dressing
- D. trading in derivatives
Answer: D
NEW QUESTION # 43
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. normative accounting theory
- C. positive accounting theory
- D. historical cost accounting theory
Answer: C
NEW QUESTION # 44
A statement of comprehensive income reports on
- A. solvency.
- B. financial performance.
- C. financial position.
- D. changes in financial position.
Answer: B
NEW QUESTION # 45
According to the Australian Accounting Standards Board, which one of the following is a benefit of adopting International Financial Reporting Standards (IFRSs)?
- A. to enable the national government to control activities of foreign multinationals
- B. to make it easier for tax authorities to calculate taxes on investors' overseas income
- C. to become a resource for developing nations who can easily adopt IFRSs as a full set of standards
- D. to increase foreign investors' understanding of local financial reports
Answer: D
NEW QUESTION # 46
Which one of the following statements is correct?
- A. Current and non-current assets are shown as separate classifications in the statement of financial position.
- B. Assets used for long-term operations are shown under working capital in the statement of financial position.
- C. A statement of financial position explains the reasons for movement of assets and liabilities through the accounting period.
- D. Liabilities are future obligations that will cause outflow of resources embodying economic benefits.
Answer: A
NEW QUESTION # 47
An agent is answerable under the contract to the agent's principal and must account for the resources of the agent's principal and the money the agent has gained working on the principal's behalf. In the context of agency, this definition describes an agent's
- A. contract.
- B. relationship.
- C. fiduciary duty.
- D. accountability.
Answer: D
NEW QUESTION # 48
Which one of the following financial statements helps provide information about factors that might affect an entity's liquidity or solvency?
- A. statement of cash flows
- B. statement of changes in equity
- C. notes to the financial statements
- D. statement of profit or loss and other comprehensive income
Answer: A
NEW QUESTION # 49
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 of any dividends paid or proposed.
- B. Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.
- C. Details regarding any significant changes to Daylight's state of affairs for the year that just ended.
- D. Details regarding accounting policies pursued by Daylight in preparation of its financial statements.
Answer: D
NEW QUESTION # 50
Which one of the following bodies makes accounting standards in Australia?
- A. AASB
- B. IASB
- C. FRC
- D. ASIC
Answer: A
NEW QUESTION # 51
The Framework for the Preparation and Presentation of Financial Statements which assists the development of the International Financial Reporting Standards (IFRS) was originally approved by the
- A. International Accounting Standards Committee (IASC).
- B. IFRS Interpretations Committee (IFRIC).
- C. International Accounting Standards Board (IASB).
- D. International Federation of Accountants (IFAC).
Answer: A
NEW QUESTION # 52
Which one of the following bases of measurement is used to implement an approach to capital maintenance based on maintaining the operating capability of a business?
- A. current purchasing power
- B. current value
- C. fair value
- D. deprival value
Answer: D
NEW QUESTION # 53
Which one of the following statements is correct about using judgement in the financial reporting process?
- A. Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.
- B. A true and fair view cannot be assured if individual judgement is allowed.
- C. Accountants should not be allowed to use their own judgement.
- D. Use of individual judgement is required to choose between alternative methods available within accounting standards.
Answer: D
NEW QUESTION # 54
Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?
- A. information processing efficiency
- B. strong form efficiency
- C. allocative efficiency
- D. semi-strong form efficiency
Answer: B
NEW QUESTION # 55
Which one of the following examples would not represent an agency cost?
- A. the cost of preparing a cost-benefit report for a new project
- B. the cost of engaging an external auditor
- C. the cost of employing an internal auditor
- D. the cost of preparing a financial report for shareholders
Answer: A
NEW QUESTION # 56
Published financial statements are regulated by
- A. shareholders who specify the framework for the provision of consistent and comparable financial information for decision-making.
- B. rules to ensure the provision of consistent financial information to investors.
- C. accounting and legal rules to ensure the provision of relevant and reliable financial information to shareholders.
- D. International Financial Reporting Standards to ensure the provision of useful financial information to shareholders.
Answer: C
NEW QUESTION # 57
PLO Advertising Ltd (PLO) buys a new stretch limousine for $40 000. A number of individuals have expressed an interest in buying the limousine from PLO for $60 000. The board members decide that the limousine is worth between $65 000 and $70 000. What is the fair value of the limousine?
- A. $60 000
- B. $40 000
- C. $65 000
- D. $70 000
Answer: A
NEW QUESTION # 58
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