Get Latest Oct-2023 Real Financial-Accounting-and-Reporting Exam Questions and Answers FREE
Truly Beneficial For Your CPA Australia Exam (Updated 100 Questions)
NEW QUESTION # 13
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 # 14
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. United States of America
- B. Canada
- C. Australia
- D. United Kingdom
Answer: D
NEW QUESTION # 15
Which of the following represents a principal-agent relationship?
I.
shareholders-auditors
II.
shareholders-management
III.
security exchange-company
IV.
board of directors-employees
- A. II, III and IV only
- B. I, II and IV only
- C. I, II, III and IV
- D. I, II and III only
Answer: B
NEW QUESTION # 16
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. International Accounting Standards Board (IASB).
- C. IFRS Interpretations Committee (IFRIC).
- D. International Federation of Accountants (IFAC).
Answer: A
NEW QUESTION # 17
The International Accounting Standards Board's Conceptual Framework for Financial Reporting for the preparation and presentation of financial statements is concerned with the information needs of most users, but not for each possible user.
Which one of the following stakeholders would not be one of the users that the Conceptual Framework is concerned about?
- A. governments and regulatory bodies
- B. members of the public who have small investment holdings in the company
- C. a company's executive management
- D. potential investors in the company
Answer: C
NEW QUESTION # 18
Which one of these is a disadvantage of a conceptual framework?
- A. It mandates the formats of various financial statements.
- B. A single framework is not suitable for all users of financial statements.
- C. It increases the chances of political interference in the development of accounting standards.
- D. It replaces the established principles.
Answer: B
NEW QUESTION # 19
In relation to financial statements, the 'true and fair override' indicates that
- A. statements need not always be true and accurate.
- B. accounting standards must be complied with under all circumstances.
- C. departure is allowed from accounting standards under specific instances to show a fair presentation.
- D. the true and fair requirement need not be complied with by certain industries.
Answer: C
NEW QUESTION # 20
Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?
- A. semi-strong form efficiency
- B. information processing efficiency
- C. allocative efficiency
- D. strong form efficiency
Answer: D
NEW QUESTION # 21
Which of the following statements are correct in the context of accounting concepts and principles?
I)The going concern assumption requires that assets be carried at their cost values.
II)Prudence allows the creation of contingency reserves and more generous provisions.
III)Financial information is considered complete even if it excludes non-material information.
IV)Understandability does not require complex information to be excluded from financial reports.
- A. II and III only
- B. I and III only
- C. III and IV only
- D. II and IV only
Answer: C
NEW QUESTION # 22
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 Standards Committee.
- B. International Accounting Board.
- C. Centre on Transnational Corporations.
- D. International Accounting Standards Board.
Answer: D
NEW QUESTION # 23
Which one of the following best describes the objective of the International Financial Reporting Standards (IFRS) Foundation?
- A. to guide investors who compare the financial statements of one entity in one country with those of another entity located elsewhere
- B. to develop an International regulatory framework in the national jurisdictions of countries that produce accountants
- C. to promote the application, convergence and use of International Financial Reporting Standards (IFRS) as a high quality reporting solution
- D. to co-ordinate the accounting profession on a global scale by issuing and establishing international standards
Answer: C
NEW QUESTION # 24
Which of the following are the stated objectives of the International Accounting Standards Board (IASB)?
I)Enforce accounting standards.
II)Develop accounting standards.
III)Work for convergence of accounting standards.
- A. I only
- B. II and III only
- C. I and II only
- D. III only
Answer: B
NEW QUESTION # 25
X was influenced by G Co's audit report and dividend declaration, and decided to invest in the securities of the company. What should X be cautious about before investing in the shares of the company?
X should be aware that
- A. a declaration of dividend is the ultimate measure of a company's profitability.
- B. the declaration of dividends assures high earnings per share.
- C. the auditor's report is influenced by the directors.
- D. the auditor's report refers to the company's prior year financials.
Answer: D
NEW QUESTION # 26
Which one of the following would be included in a statement of financial position?
- A. retained earnings
- B. finance costs
- C. cost of sales
- D. proceeds from long term borrowings
Answer: A
NEW QUESTION # 27
Which one of the following is the correct treatment of sales?
- A. Cash sales are recorded in the receivables ledger prior to posting to the general ledger.
- B. Credit sales are not recorded in the receivables ledger prior to posting to the general ledger.
- C. Cash and credit sales are recorded in the receivables ledger prior to posting to the general ledger.
- D. Credit sales are recorded in the receivables ledger prior to posting to the general ledger.
Answer: D
NEW QUESTION # 28
The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal, refers to which basis of measurement?
- A. historical cost
- B. current cost
- C. present value
- D. realisable value
Answer: D
NEW QUESTION # 29
Which one of the following bodies makes accounting standards in Australia?
- A. FRC
- B. ASIC
- C. IASB
- D. AASB
Answer: D
NEW QUESTION # 30
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