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Updated: Aug 28, 2025
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CPA Australia CPA Financial Accounting and Reporting Sample Questions:
1. Which one of the following methods is not used for 'creative accounting'?
A) aggressive debt management
B) off balance sheet financing
C) window dressing
D) profit smoothing
2. A decision has been made to change the value of a major non-current asset, upon which depreciation is based, from original cost to a revalued amount. This results in a change in
A) accounting estimate and must be disclosed.
B) measurement basis and does not need to be disclosed.
C) accounting estimate and does not need to be disclosed.
D) measurement basis and must be disclosed.
3. 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) II and III only
B) III and IV only
C) I and III only
D) I and IV only
4. 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) Accountants should not be allowed to use their own judgement.
C) Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.
D) A true and fair view cannot be assured if individual judgement is allowed.
5. The concept of transparency in corporate governance means that listed companies should disclose
A) their future strategy.
B) only mandatory information by management.
C) material information that affects decisions.
D) confidential issues relating to competitors.
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: A | Question # 5 Answer: C |
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By Stanley
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By Winfred
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By Bernice
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