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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. Which one of the following statements is not correct in respect of manual accounting systems?

A) It is easy to make corrections.
B) Productivity in manual systems is lower than computer systems.
C) Risk of error is greater and the quality of outputs is inferior.
D) They are bulky to store compared to computer systems.

2. A statement of generally accepted theoretical principles which form the frame of reference for financial reporting refers to the

A) Conceptual Framework.
B) International Financial Reporting Standards.
C) Regulatory Framework.
D) Generally Accepted Accounting Principles.

3. In an efficient market, normally if interest rates rise, share prices will

A) fall since investors expect a higher return.
B) fall in anticipation of a reversal in the interest rate cycle.
C) rise since banks invest their increased profits.
D) rise due to the overall positive sentiment.

4. In a stock market that displays strong efficiency, share prices reflect all available

A) public information.
B) public and inside information.
C) information about past changes in share prices.
D) information about future expansion plans.

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

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

Solutions: