Winter Sale Limited Time 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: s2p65

Easiest Solution 2 Pass Your Certification Exams

Financial-Accounting-and-Reporting CPA Australia CPA Financial Accounting and Reporting Exam Free Practice Exam Questions (2025 Updated)

Prepare effectively for your CPA Australia Financial-Accounting-and-Reporting CPA Financial Accounting and Reporting Exam certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

CPA Australia Financial-Accounting-and-Reporting Premium Access     Download Demo    
Page: 1 / 2
Total 100 questions

You assumed the role as the Chairperson of the Board of Directors of Daylight Ltd. As you start to write your first directors' report, which one of the following areas are you not required to include in your report? 

A.

Details of any dividends paid or proposed.

B.

Details regarding any significant changes to Daylight's state of affairs for the year that just ended.

C.

Details regarding accounting policies pursued by Daylight in preparation of its financial statements.

D.

Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.

In a stock market that displays strong efficiency, share prices reflect all available

A.

public information.

B.

public and inside information.

C.

information about future expansion plans.

D.

information about past changes in share prices.

Which one of the following practices is not considered creative accounting?

A.

profit smoothing

B.

window dressing

C.

trading in derivatives

D.

aggressive earnings management

Which one of the following contributes to an efficient capital market?

A.

having stock markets in every country

B.

information about the stock market can be obtained cheaply

C.

stock markets ensuring that companies do not overcharge for their products

D.

stock markets being managed by directors of companies that are listed on the stock market

Which one of the following is not a function of the trustees of the International Financial Reporting Standards Foundation (IFRS Foundation)?

A.

ensuring the financing of the International Accounting Standards Board (IASB)

B.

appointing the members of the International Accounting Standards Board (IASB)

C.

promoting the application of International Financial Reporting Standards (IFRSs)

D.

providing suggestions on technical matters relating to accounting standards

Which one of the following statements is correct?

A.

Australian accounting standards are based on the US GAAP.

B.

Accounting standards prescribe the possible accounting treatments.

C.

Accounting standards are developed and maintained using a consultative process with the OECD.

D.

Accounting standards provide the basic knowledge upon which the conceptual framework is developed.

To be relevant, financial information has to

 

I)be provided in a timely manner.

II)comply with the going concern assumption.

III)have predictive and/or confirmatory value.

IV)exclude computations that are difficult to understand.

A.

I and II only

B.

I and III only

C.

II and III only

D.

III and IV only

Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?

A.

allocative efficiency

B.

strong form efficiency

C.

semi-strong form efficiency

D.

information processing efficiency

Which one of these is a key principle of good corporate governance?

A.

effective communication with shareholders

B.

restriction of shareholders' rights in decision-making

C.

effective management of the employees of the company

D.

non-disclosure of directors' agency relationship with the company

Which one of the following parties provides information to ensure that the financial statements show a true and fair view?

A.

shareholders

B.

tax consultants

C.

financial Institutions

D.

directors of the company

The two fundamental qualitative characteristics of the financial information are

A.

verifiability and relevance.

B.

relevance and comparability.

C.

relevance and faithful representation.

D.

faithful representation and comparability.

Which one of the following financial statements helps provide information about factors that might affect an entity's liquidity or solvency?

A.

statement of cash flows

B.

statement of changes in equity

C.

notes to the financial statements

D.

statement of profit or loss and other comprehensive income

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

A.

is a rule-driven approach.

B.

attempts to cover specific eventualities.

C.

provides a theoretical basis with broad terms of reference.

D.

removes any element of judgement by providing clear requirements.

What is the difference between positive and normative accounting theories?

A.

Positive accounting theory explains what should occur.

B.

Normative accounting theory specifies the prediction rules for items.

C.

Normative accounting theory explains what should occur instead of predicting what is expected to occur.

D.

Normative accounting theory predicts what is expected to occur rather than explaining what should occur.

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.

present value

C.

historical cost

D.

realisable value

Which one of the following is not an advantage of accounting regulation?

A.

It provides quality of information in and across financial statements.

B.

It provides flexibility in the way accounting information is presented to users.

C.

It provides the required accounting information to all necessary shareholders.

D.

It instils public confidence in the accounting system employed in commerce and industry.

Which one of the following bases of measurement is used to implement an approach to capital maintenance based on maintaining the operating capability of a business?

A.

fair value

B.

current value

C.

deprival value

D.

current purchasing power

Which one of the following would be included in a statement of financial position?

A.

cost of sales

B.

finance costs

C.

retained earnings

D.

proceeds from long term borrowings

An agent is answerable under the contract to the agent's principal and must account for the resources of the agent's principal and the money the agent has gained working on the principal's behalf. In the context of agency, this definition describes an agent's

A.

contract.

B.

relationship.

C.

fiduciary duty.

D.

accountability.

The ability of a company to pay its bills when and as they fall due is a measure of

A.

solvency.

B.

economic value.

C.

compliance with the conceptual framework.

D.

the true and fair view of the financial report.

CPA Australia Financial-Accounting-and-Reporting Premium Access     Download Demo    
Page: 1 / 2
Total 100 questions
Copyright © 2014-2025 Solution2Pass. All Rights Reserved