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CPA Australia Financial-Accounting-and-Reporting - CPA Financial Accounting and Reporting Exam

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Total 100 questions

Which one of the following is an accurate definition of fair value of an asset?

A.

The cost of replacing an asset with an identical item.

B.

The price for which an asset could be sold net of disposal costs.

C.

The amount yet to be written off over the remainder of the asset's useful life.

D.

The price for which an asset could be sold in an orderly transaction between market participants at the measurement date.

Which one of the following contributes to an efficient capital market?

A.

having stock markets in every country

B.

information about the stock market can be obtained cheaply

C.

stock markets ensuring that companies do not overcharge for their products

D.

stock markets being managed by directors of companies that are listed on the stock market

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

A.

It enables raw data to be just easily verifiable but not auditable.

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 supposes that value of net assets clearly reflects general goods and services are bought once assets were released.

The body that is part of the international standard-setting framework reporting to the International Financial Reporting Standards Foundation (IFRS Foundation) is the

A.

International Accounting Board.

B.

Centre on Transnational Corporations.

C.

International Accounting Standards Board.

D.

International Accounting Standards Committee.

Historical cost accounting provides financial information that is

A.

relevant for decision making.

B.

relevant and reliable for decision making.

C.

relevant but may not be reliable for decision making.

D.

reliable but may not be relevant for decision making.

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 comply with the information demands of government bodies in home country

B.

to present the company's financial performance in the most favourable way

C.

to present the financial statements in a manner that is understood by most users

D.

to be consistent with the methodologies followed in the home country of the company

According to the IASB's Conceptual Framework, the key reason general purpose financial statements are produced is to satisfy the information needs of

A.

employees.

B.

management.

C.

internal users.

D.

capital providers.

Which one of the following bodies makes accounting standards in Australia?

A.

ASIC

B.

FRC

C.

IASB

D.

AASB

Which one of the following is not an advantage of accounting regulation?

A.

It provides quality of information in and across financial statements.

B.

It provides flexibility in the way accounting information is presented to users.

C.

It provides the required accounting information to all necessary shareholders.

D.

It instils public confidence in the accounting system employed in commerce and industry.

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.

I and II only

B.

I and III only

C.

II and III only

D.

III and IV only