[Full-Version] 2024 New Preparation Guide of CPA Australia Financial-Accounting-and-Reporting Exam
Financial-Accounting-and-Reporting Practice Exam - 100 Unique Questions
NEW QUESTION # 46
According to IASB's Conceptual Framework, an expense is a decrease in economic benefits in the form of
I.
outflows.
II.
decreases of assets.
III.
incurrences of liabilities.
IV.
contributions to equity holders.
- A. I, II and IV only
- B. I, III and IV only
- C. I, II and III only
- D. II, III and IV only
Answer: C
NEW QUESTION # 47
A company purchased a machine 10 years ago for $143 890. It is expected that the machine will generate future revenues of $108 495. The machine could be scrapped for $81 232. An equivalent machine in the same condition would cost $94 950 to buy now. What is the deprival value of the asset?
- A. $108 495
- B. $35 395
- C. $94 950
- D. $81 232
Answer: C
NEW QUESTION # 48
The International Accounting Standards Board's Conceptual Framework for Financial Reporting for the preparation and presentation of financial statements is concerned with the information needs of most users, but not for each possible user.
Which one of the following stakeholders would not be one of the users that the Conceptual Framework is concerned about?
- A. governments and regulatory bodies
- B. potential investors in the company
- C. a company's executive management
- D. members of the public who have small investment holdings in the company
Answer: C
NEW QUESTION # 49
The International Federation of Accountants (IFAC) was established by
- A. the United Nations.
- B. the International Accounting Standards Board.
- C. various professional accounting bodies.
- D. the Organization for Economic Co-operation & Development.
Answer: C
NEW QUESTION # 50
Investors use the audited financial statements of a company to
I)evaluate the company's current return on assets
II)predict the company's market conditions for future years.
III)predict the company's market conditions for future years.
IV)make a judgement on the liquidity and solvency of the company.
- A. III and IV only
- B. I and III only
- C. I and IV only
- D. II and III only
Answer: C
NEW QUESTION # 51
According to the IASB's Conceptual Framework, the key reason general purpose financial statements are produced is to satisfy the information needs of
- A. management.
- B. internal users.
- C. employees.
- D. capital providers.
Answer: D
NEW QUESTION # 52
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. providing suggestions on technical matters relating to accounting standards
- D. promoting the application of International Financial Reporting Standards (IFRSs)
Answer: C
NEW QUESTION # 53
A decision has been made to change the value of a major non-current asset, upon which depreciation is based, from original cost to a revalued amount. This results in a change in
- A. accounting estimate and does not need to be disclosed.
- B. accounting estimate and must be disclosed.
- C. measurement basis and must be disclosed.
- D. measurement basis and does not need to be disclosed.
Answer: C
NEW QUESTION # 54
In relation to financial statements, the 'true and fair override' indicates that
- A. departure is allowed from accounting standards under specific instances to show a fair presentation.
- B. statements need not always be true and accurate.
- C. accounting standards must be complied with under all circumstances.
- D. the true and fair requirement need not be complied with by certain industries.
Answer: A
NEW QUESTION # 55
A decrease in assets is most likely to be recognised in the financial report as
- A. a liability.
- B. an expense.
- C. revenue earned.
- D. a change in equity.
Answer: B
NEW QUESTION # 56
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. $40 000
- B. $60 000
- C. $65 000
- D. $70 000
Answer: B
NEW QUESTION # 57
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. various management accounting reports.
- B. the annual financial report.
- C. the company's accounting policies.
- D. financial statements as specified by IAS 1 Presentation of Financial Statements.
Answer: A
NEW QUESTION # 58
Which one of the following practices is not considered creative accounting?
- A. window dressing
- B. aggressive earnings management
- C. trading in derivatives
- D. profit smoothing
Answer: C
NEW QUESTION # 59
Venturer Ltd has received fees from venture capital activities and has engaged you as the accountant to prepare the financial report for 31 December 20X0. Unable to find a specific reference to venture capital fees in either the conceptual framework or the accounting standards, you establish the appropriate accounting treatment by
- A. using your professional judgment and referring to the conceptual framework's definitions and recognition criteria.
- B. consulting with the International Accounting Standards Board.
- C. using your professional judgment and referring to generally accepted accounting principles and practice.
- D. referring to the fundamental accounting assumptions and conventions.
Answer: A
NEW QUESTION # 60
Which of the following statements are correct in the context of accounting concepts and principles?
I)The going concern assumption requires that assets be carried at their cost values.
II)Prudence allows the creation of contingency reserves and more generous provisions.
III)Financial information is considered complete even if it excludes non-material information.
IV)Understandability does not require complex information to be excluded from financial reports.
- A. III and IV only
- B. I and III only
- C. II and IV only
- D. II and III only
Answer: A
NEW QUESTION # 61
LMN Ltd recently changed the measurement base for their assets. They should I)treat this like a change in an estimate.
II)treat this like a change in the accounting policy.
III)disclose this in the notes to financial statements.
- A. I only
- B. I and III only
- C. II and III only
- D. III only
Answer: C
NEW QUESTION # 62
According to the IASB Conceptual Framework, income is an increase in economic benefits in the form of I)inflows.
II)decreases of liabilities.
III)enhancements of assets.
IV)contributions from equity holders.
- A. I, II and IV only
- B. I, III and IV only
- C. I, II and III only
- D. II, III and IV only
Answer: C
NEW QUESTION # 63
Which one of the following financial statements helps provide information about factors that might affect an entity's liquidity or solvency?
- A. statement of changes in equity
- B. statement of cash flows
- C. notes to the financial statements
- D. statement of profit or loss and other comprehensive income
Answer: B
NEW QUESTION # 64
Liquidity of a company is based on its ability to
- A. buy back shares.
- B. meet short term commitments.
- C. pay dividends to shareholders.
- D. meet long term commitments.
Answer: B
NEW QUESTION # 65
A statement of comprehensive income reports on
- A. changes in financial position.
- B. financial performance.
- C. solvency.
- D. financial position.
Answer: B
NEW QUESTION # 66
Which one of the following is an objective of the International Federation of Accountants (IFAC)?
- A. to provide direction to the Financial Accounting Standards Board (FASB)
- B. to issue new international financial reporting standards (IFRS)
- C. to provide advice on accounting standards to the OECD
- D. to establish high quality professional standards in accountancy
Answer: D
NEW QUESTION # 67
The IASB evaluates the merits of adding a potential item to its agenda mainly by reference to the needs of
- A. investors.
- B. suppliers.
- C. tax agencies.
- D. regulatory authorities.
Answer: A
NEW QUESTION # 68
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.
Answer: C
NEW QUESTION # 69
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CPA Australia Financial-Accounting-and-Reporting (CPA Financial Accounting and Reporting) Exam is a comprehensive test that assesses the knowledge and skills of candidates in financial accounting and reporting. Financial-Accounting-and-Reporting exam is designed for individuals who want to become certified public accountants (CPAs) in Australia. It is a rigorous exam that requires candidates to demonstrate their ability to apply accounting concepts and principles to real-world situations.
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