Ultimate Guide to Prepare Financial-Accounting-and-Reporting Certification Exam for CPA Foundation Program in 2021
Use Real Financial-Accounting-and-Reporting Dumps - CPA Australia Correct Answers updated on 2021
NEW QUESTION 39
Which one of the following contributes to an efficient capital market?
- A. having stock markets in every country
- B. stock markets ensuring that companies do not overcharge for their products
- C. stock markets being managed by directors of companies that are listed on the stock market
- D. information about the stock market can be obtained cheaply
Answer: D
NEW QUESTION 40
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. I and III only
- B. III and IV only
- C. I and IV only
- D. II and III only
Answer: C
NEW QUESTION 41
Which one of the following is an objective of the International Federation of Accountants (IFAC)?
- A. to provide advice on accounting standards to the OECD
- B. to establish high quality professional standards in accountancy
- C. to provide direction to the Financial Accounting Standards Board (FASB)
- D. to issue new international financial reporting standards (IFRS)
Answer: B
NEW QUESTION 42
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. consulting with the International Accounting Standards Board.
- B. referring to the fundamental accounting assumptions and conventions.
- C. using your professional judgment and referring to the conceptual framework's definitions and recognition criteria.
- D. using your professional judgment and referring to generally accepted accounting principles and practice.
Answer: C
NEW QUESTION 43
The chairperson of XYZ Company is concerned about the readability of the annual financial report that is about to be published on its website. XYZ Company is obliged to comply with International Financial Reporting Standards, and the report contains all of the required financial statements, the auditor's report, corporate governance statements, declarations of accounting policy, explanatory notes and a section that addresses the company's corporate social responsibility program.
The chairperson is wondering whether the report can be condensed. The issue that is concerning the chairperson is known as
- A. the cost of compliance.
- B. the costs of social responsibility reporting.
- C. the agency costs of monitoring.
- D. information overload.
Answer: D
NEW QUESTION 44
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. normative accounting theory
- B. historical cost accounting theory
- C. general accounting theory
- D. positive accounting theory
Answer: D
NEW QUESTION 45
Which one of these concepts suggests that stock prices react to new information almost instantly?
- A. incentive substitution
- B. market power
- C. efficient market
- D. bargaining power
Answer: C
NEW QUESTION 46
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 property, plant and equipment
- D. accounting for inventories
Answer: B
NEW QUESTION 47
Which one of the following bodies makes accounting standards in Australia?
- A. ASIC
- B. AASB
- C. FRC
- D. IASB
Answer: B
NEW QUESTION 48
Which one of the following is an advantage of current purchasing power accounting?
- A. It provides a clear use of indices which approximates the measurement of value.
- B. It enables raw data to be just easily verifiable but not auditable.
- C. It provides a stable monetary unit that values profit and capital.
- D. It supposes that value of net assets clearly reflects general goods and services are bought once assets were released.
Answer: C
NEW QUESTION 49
An example of voluntary reporting in Australia is a
- A. statement of comprehensive income.
- B. sustainability report.
- C. statement of cash flows.
- D. statement of financial position.
Answer: B
NEW QUESTION 50
In applying accounting standards, an entity develops accounting policies that ensure that the financial statements present
- A. comparable and accurate financial information to all shareholders.
- B. relevant and reliable financial information.
- C. relevant and correct financial information to all interested shareholders.
- D. understandable and clear financial information to all interested shareholders.
Answer: B
NEW QUESTION 51
Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?
- A. information processing efficiency
- B. allocative efficiency
- C. semi-strong form efficiency
- D. strong form efficiency
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. providing suggestions on technical matters relating to accounting standards
- C. appointing the members of the International Accounting Standards Board (IASB)
- D. promoting the application of International Financial Reporting Standards (IFRSs)
Answer: B
NEW QUESTION 53
XYZ Ltd is listed on the Australian Securities Exchange (ASX). Which one of the following reports is the company required to prepare as a part of its annual financial report?
- A. chairman's statement
- B. sustainability report
- C. management commentary
- D. corporate governance statement
Answer: D
NEW QUESTION 54
X was influenced by G Co's audit report and dividend declaration, and decided to invest in the securities of the company. What should X be cautious about before investing in the shares of the company?
X should be aware that
- A. the auditor's report is influenced by the directors.
- B. the declaration of dividends assures high earnings per share.
- C. the auditor's report refers to the company's prior year financials.
- D. a declaration of dividend is the ultimate measure of a company's profitability.
Answer: C
NEW QUESTION 55
The Framework for the Preparation and Presentation of Financial Statements which assists the development of the International Financial Reporting Standards (IFRS) was originally approved by the
- A. International Accounting Standards Committee (IASC).
- B. IFRS Interpretations Committee (IFRIC).
- C. International Accounting Standards Board (IASB).
- D. International Federation of Accountants (IFAC).
Answer: A
NEW QUESTION 56
Which one of the following bases of measurement is used to implement an approach to capital maintenance based on maintaining the operating capability of a business?
- A. deprival value
- B. current purchasing power
- C. fair value
- D. current value
Answer: A
NEW QUESTION 57
Which one of the following describes the key advantage of the manual system of accounting?
- A. A thorough understanding of the business can be gained through it.
- B. Processing is maintained at a reasonable speed even while dealing with large volumes of data.
- C. The quality of output is not necessarily an issue.
- D. Corrections are easily managed as updating or recreating the whole document is not difficult.
Answer: A
NEW QUESTION 58
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 and III only
- B. III only
- C. I only
- D. II and III only
Answer: D
NEW QUESTION 59
Which one of the following examples would not represent an agency cost?
- A. the cost of engaging an external auditor
- B. the cost of preparing a cost-benefit report for a new project
- C. the cost of employing an internal auditor
- D. the cost of preparing a financial report for shareholders
Answer: B
NEW QUESTION 60
In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of
- A. national company law, national accounting standards and local stock exchange requirements.
- B. national company law and local stock exchange requirements.
- C. national company law and national accounting standards.
- D. company law, accounting standards, local stock exchange requirements and international accounting standards.
Answer: A
NEW QUESTION 61
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