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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Generally accepted accounting practice recognises revenue when

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

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

3. 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) II, III and IV only
B) I, II and IV only
C) I, II, III and IV
D) I, II and III only

4. Restrictions on the scope of a specific accounting standard are stated in

A) that specific standard.
B) various Statements of Accounting Concepts (SACs) issued by the AASB.
C) the IASB's Conceptual Framework.
D) the explanatory materials provided by the AASB.

5. The chairperson of XYZ Company is concerned about the readability of the annual financial report that is about to be published on its website. XYZ Company is obliged to comply with International Financial Reporting Standards, and the report contains all of the required financial statements, the auditor's report, corporate governance statements, declarations of accounting policy, explanatory notes and a section that addresses the company's corporate social responsibility program.
The chairperson is wondering whether the report can be condensed. The issue that is concerning the chairperson is known as

A) information overload.
B) the agency costs of monitoring.
C) the costs of social responsibility reporting.
D) the cost of compliance.

Solutions: