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CPA Australia CPA Financial Accounting and Reporting Exam Sample Questions (Q57-Q62):

NEW QUESTION # 57
Historical cost accounting provides financial information that is

A. relevant for decision making.
B. reliable but may not be relevant for decision making.
C. relevant but may not be reliable for decision making.
D. relevant and reliable for decision making.

Answer: B

NEW QUESTION # 58
Which one of the following is the correct treatment of sales?

A. Credit sales are recorded in the receivables ledger prior to posting to the general ledger.
B. Cash sales are recorded in the receivables ledger prior to posting to the general ledger.
C. Credit sales are not recorded in the receivables ledger prior to posting to the general ledger.
D. Cash and credit sales are recorded in the receivables ledger prior to posting to the general ledger.

Answer: A

NEW QUESTION # 59
Which one of the following situations would result in either a new liability being recognised or an existing liability being increased?

A. A company establishes an asset revaluation reserve.
B. A company pays only half of an overdue invoice.
C. At the end of the reporting period, there are unpaid wages.
D. A company recognises the depreciation expense for the current period.

Answer: C

NEW QUESTION # 60
A rules-based approach to standard setting

A. ensures there are no conflicts within accounting standards as each issue is handled just once.
B. helps a standard-setting body to prioritise matters.
C. provides a broad framework for standard setting.
D. prescribes standards that attempt to cover all eventualities a business may face.

Answer: D

NEW QUESTION # 61
According to the IASB Conceptual Framework, income is an increase in economic benefits in the form of I)inflows.
II)decreases of liabilities.
III)enhancements of assets.
IV)contributions from equity holders.

A. I, II and IV only
B. II, III and IV only
C. I, III and IV only
D. I, II and III only

Answer: D

NEW QUESTION # 62
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