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

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

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

3. Which one of the following is not an Australian Securities Exchange (ASX) principle of good corporate governance?

A) Remunerate fairly and responsibly.
B) Promote ethical and responsible decision-making.
C) Respect the rights of shareholders.
D) Safeguard the environment.

4. Which accounting theory is best described by the statement 'An approach to accounting is one where a theory is thought of as a body of knowledge that explains and attempts to predict actual accounting practice'?

A) general accounting theory
B) normative accounting theory
C) historical cost accounting theory
D) positive accounting theory

5. 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.

Solutions: