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CPA Australia Financial-Accounting-and-Reporting Exam Syllabus Topics:

CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. 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) relationship.
B) contract.
C) fiduciary duty.
D) accountability.

2. Which one of the following statements is correct about using judgement in the financial reporting process?

A) A true and fair view cannot be assured if individual judgement is allowed.
B) Use of individual judgement is required to choose between alternative methods available within accounting standards.
C) Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.
D) Accountants should not be allowed to use their own judgement.

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

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

4. Which one of these concepts suggests that stock prices react to new information almost instantly?

A) incentive substitution
B) bargaining power
C) efficient market
D) market power

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

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

Solutions: