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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 describes the key advantage of the manual system of accounting?

A.

The quality of output is not necessarily an issue.

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.

Processing is maintained at a reasonable speed even while dealing with large volumes of data.

Variations in the regulatory regime over financial reporting in different countries is attributable to a range of differences including

A.

company structures, ownership, local culture and the level of development of the country.

B.

the needs of investors, creditors, employees, lending institutions and taxation authorities.

C.

consumer laws, taxation requirements and the extent to which the country has adopted international financial reporting standards.

D.

the extent to which the country has adopted international financial reporting standards and the requirements of local securities exchange.

An element is recognised in the statement of financial position or statement of comprehensive income if

 

I.

the value of the item can be measured reliably.

II.

the value of the item can be measured accurately.

III.

it is certain that there will be future economic benefits associated with the item.

IV.

it is probable that there will be future economic benefits associated with the item.

Which of the above options are correct?

A.

I and III only

B.

I and IV only

C.

II and III only

D.

III and IV only

A decision has been made to change the value of a major non-current asset, upon which depreciation is based, from original cost to a revalued amount. This results in a change in

A.

measurement basis and must be disclosed.

B.

accounting estimate and must be disclosed.

C.

measurement basis and does not need to be disclosed.

D.

accounting estimate and does not need to be disclosed.

The concept of transparency in corporate governance means that listed companies should disclose

A.

their future strategy.

B.

confidential issues relating to competitors.

C.

material information that affects decisions.

D.

only mandatory information by management.

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.

Details regarding any significant changes to Daylight's state of affairs for the year that just ended.

C.

Details regarding accounting policies pursued by Daylight in preparation of its financial statements.

D.

Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.

A company purchased a machine 10 years ago for $143 890. It is expected that the machine will generate future revenues of $108 495. The machine could be scrapped for $81 232. An equivalent machine in the same condition would cost $94 950 to buy now. What is the deprival value of the asset?

A.

$35 395

B.

$81 232

C.

$94 950

D.

$108 495

Which one of the following countries has the view that Generally Accepted Accounting Principles (GAAP) refers to accounting practices which are regarded as permissible by the accounting profession?

A.

Canada

B.

Australia

C.

United Kingdom

D.

United States of America

Which one of the following statements is not correct in respect of manual accounting systems?

A.

It is easy to make corrections.

B.

They are bulky to store compared to computer systems.

C.

Risk of error is greater and the quality of outputs is inferior.

D.

Productivity in manual systems is lower than computer systems.

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.

$40 000

B.

$60 000

C.

$65 000

D.

$70 000