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CPA Australia CPA Financial Accounting and Reporting Sample Questions:
1. Historical cost accounting provides financial information that is
A) reliable but may not be relevant for decision making.
B) relevant but may not be reliable for decision making.
C) relevant and reliable for decision making.
D) relevant for decision making.
2. 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) I, II, III and IV
B) I, II and IV only
C) I, II and III only
D) II, III and IV only
3. The objective of the International Accounting Standards Board (IASB) is to
A) enforce International Financial Reporting Standards.
B) oversee the standard setting process and International Financial Reporting Standards Advisory Council.
C) provide strategic advice to the International Financial Reporting Standards Advisory Council.
D) set International Financial Reporting Standards.
4. Which one of these is a disadvantage of a conceptual framework?
A) It replaces the established principles.
B) It increases the chances of political interference in the development of accounting standards.
C) It mandates the formats of various financial statements.
D) A single framework is not suitable for all users of financial statements.
5. A company's financial report is compliant with International Financial Reporting Standards. Where in the report would an investor find the amount of money received by the company for investment activities?
A) statement of comprehensive income
B) statement of changes in equity
C) statement of cash flows
D) statement of financial position
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: C |
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