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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. A decrease in assets is most likely to be recognised in the financial report as

A) a change in equity.
B) revenue earned.
C) a liability.
D) an expense.

2. Liquidity of a company is based on its ability to

A) meet long term commitments.
B) pay dividends to shareholders.
C) buy back shares.
D) meet short term commitments.

3. PLO Advertising Ltd (PLO) buys a new stretch limousine for $40 000. A number of individuals have expressed an interest in buying the limousine from PLO for $60 000. The board members decide that the limousine is worth between $65 000 and $70 000. What is the fair value of the limousine?

A) $65 000
B) $70 000
C) $40 000
D) $60 000

4. In the context of a regulatory framework, a principles-based system

A) attempts to cover specific eventualities.
B) is a rule-driven approach.
C) provides a theoretical basis with broad terms of reference.
D) removes any element of judgement by providing clear requirements.

5. Financial information is reliable if it
I)prefers substance over legal form.
II)is neutral and without any material error.
III)is complete and has been made with prudence.
IV)is understandable to those with no knowledge of accounting.

A) II, III and IV only
B) I, III and IV only
C) I, II and IV only
D) I, II and III only

Solutions: