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CPA Australia Financial-Accounting-and-Reporting Exam Syllabus Topics:

CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. What is the difference between positive and normative accounting theories?

A) Normative accounting theory explains what should occur instead of predicting what is expected to occur.
B) Positive accounting theory explains what should occur.
C) Normative accounting theory specifies the prediction rules for items.
D) Normative accounting theory predicts what is expected to occur rather than explaining what should occur.

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

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

3. Which one of the following would be included in the statement of financial position?

A) depreciation
B) deferred tax
C) distribution costs
D) gains on property valuations

4. Which one of the following countries has the view that Generally Accepted Accounting Principles (GAAP) refers to accounting practices which are regarded as permissible by the accounting profession?

A) United States of America
B) Australia
C) United Kingdom
D) Canada

5. 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) a declaration of dividend is the ultimate measure of a company's profitability.
C) the auditor's report refers to the company's prior year financials.
D) the declaration of dividends assures high earnings per share.

Solutions: