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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. The use of the principle of substance over form is found in which one of the following accounting treatments?

A) accounting for non-current assets
B) accounting for finance leases
C) accounting for inventories
D) accounting for property, plant and equipment

2. Which one of the following methods is not used for 'creative accounting'?

A) off balance sheet financing
B) aggressive debt management
C) profit smoothing
D) window dressing

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

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

4. The two fundamental qualitative characteristics of the financial information are

A) faithful representation and comparability.
B) relevance and comparability.
C) verifiability and relevance.
D) relevance and faithful representation.

5. The concept of transparency in corporate governance means that listed companies should disclose

A) material information that affects decisions.
B) only mandatory information by management.
C) their future strategy.
D) confidential issues relating to competitors.

Solutions: