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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

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

2. What is the difference between positive and normative accounting theories?

A) Positive accounting theory explains what should occur.
B) Normative accounting theory predicts what is expected to occur rather than explaining what should occur.
C) Normative accounting theory explains what should occur instead of predicting what is expected to occur.
D) Normative accounting theory specifies the prediction rules for items.

3. According to the IASB's Conceptual Framework, the key reason general purpose financial statements are produced is to satisfy the information needs of

A) capital providers.
B) management.
C) internal users.
D) employees.

4. In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of

A) national company law and local stock exchange requirements.
B) national company law, national accounting standards and local stock exchange requirements.
C) company law, accounting standards, local stock exchange requirements and international accounting standards.
D) national company law and national accounting standards.

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

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

Solutions: