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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. According to IASB's Conceptual Framework, an expense is a decrease in economic benefits in the form of
I.
outflows.
II.
decreases of assets.
III.
incurrences of liabilities.
IV.
contributions to equity holders.

A) I, III and IV only
B) I, II and IV only
C) I, II and III only
D) II, III and IV only

2. LMN Ltd recently changed the measurement base for their assets. They should I)treat this like a change in an estimate.
II)treat this like a change in the accounting policy.
III)disclose this in the notes to financial statements.

A) III only
B) I only
C) I and III only
D) II and III only

3. Which one of the following is an objective of the International Federation of Accountants (IFAC)?

A) to establish high quality professional standards in accountancy
B) to provide direction to the Financial Accounting Standards Board (FASB)
C) to issue new international financial reporting standards (IFRS)
D) to provide advice on accounting standards to the OECD

4. When business managers seek detailed information about the profitability or efficiency of different parts of their operations, they would find the most useful information in

A) financial statements as specified by IAS 1 Presentation of Financial Statements.
B) the company's accounting policies.
C) various management accounting reports.
D) the annual financial report.

5. Which one of these is a disadvantage of a conceptual framework?

A) It replaces the established principles.
B) A single framework is not suitable for all users of financial statements.
C) It mandates the formats of various financial statements.
D) It increases the chances of political interference in the development of accounting standards.

Solutions: