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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. A rules-based approach to standard setting

A) ensures there are no conflicts within accounting standards as each issue is handled just once.
B) helps a standard-setting body to prioritise matters.
C) provides a broad framework for standard setting.
D) prescribes standards that attempt to cover all eventualities a business may face.

2. Which one of the following statements is correct?

A) Accounting standards are developed and maintained using a consultative process with the OECD.
B) Australian accounting standards are based on the US GAAP.
C) Accounting standards prescribe the possible accounting treatments.
D) Accounting standards provide the basic knowledge upon which the conceptual framework is developed.

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

A) effective communication with shareholders
B) effective management of the employees of the company
C) restriction of shareholders' rights in decision-making
D) non-disclosure of directors' agency relationship with the company

4. A statement of comprehensive income reports on

A) financial performance.
B) solvency.
C) financial position.
D) changes in financial position.

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

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

Solutions: