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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Generally accepted accounting practice recognises revenue when

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

2. An agent is answerable under the contract to the agent's principal and must account for the resources of the agent's principal and the money the agent has gained working on the principal's behalf. In the context of agency, this definition describes an agent's

A) relationship.
B) contract.
C) accountability.
D) fiduciary duty.

3. In applying accounting standards, an entity develops accounting policies that ensure that the financial statements present

A) relevant and reliable financial information.
B) understandable and clear financial information to all interested shareholders.
C) comparable and accurate financial information to all shareholders.
D) relevant and correct financial information to all interested shareholders.

4. A statement of generally accepted theoretical principles which form the frame of reference for financial reporting refers to the

A) Generally Accepted Accounting Principles.
B) International Financial Reporting Standards.
C) Conceptual Framework.
D) Regulatory Framework.

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

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

Solutions: