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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

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

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

2. Generally accepted accounting practice recognises revenue when

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

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

A) It provides flexibility in the way accounting information is presented to users.
B) It provides quality of information in and across financial statements.
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.

4. Which one of the following statements regarding the IASB's Conceptual Framework for Financial Reporting is correct?

A) It specifies the concepts that underlie the preparation and presentation of only consolidated financial statements.
B) It specifies the concepts that underlie the preparation and presentation of general purpose financial statements.
C) It specifies the concepts that underlie the preparation and presentation of special purpose financial statements.
D) It overrides any local or international accounting standard.

5. In relation to financial statements, the 'true and fair override' indicates that

A) the true and fair requirement need not be complied with by certain industries.
B) departure is allowed from accounting standards under specific instances to show a fair presentation.
C) statements need not always be true and accurate.
D) accounting standards must be complied with under all circumstances.

Solutions: