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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Which one of the following methods is not used for 'creative accounting'?

A) profit smoothing
B) off balance sheet financing
C) aggressive debt management
D) window dressing

2. 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) realisable value
B) current cost
C) historical cost
D) present value

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. According to the Australian Accounting Standards Board, which one of the following is a benefit of adopting International Financial Reporting Standards (IFRSs)?

A) to make it easier for tax authorities to calculate taxes on investors' overseas income
B) to become a resource for developing nations who can easily adopt IFRSs as a full set of standards
C) to increase foreign investors' understanding of local financial reports
D) to enable the national government to control activities of foreign multinationals

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

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

Solutions: