100% Updated CPA Australia Financial-Accounting-and-Reporting Enterprise PDF Dumps [Q44-Q66]

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100% Updated CPA Australia Financial-Accounting-and-Reporting Enterprise PDF Dumps

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NEW QUESTION 44
Published financial statements are regulated by

rules to ensure the provision of consistent financial information to investors.

International Financial Reporting Standards to ensure the provision of useful financial information to shareholders.

accounting and legal rules to ensure the provision of relevant and reliable financial information to shareholders.

shareholders who specify the framework for the provision of consistent and comparable financial information for decision-making.

NEW QUESTION 45
In an efficient market, normally if interest rates rise, share prices will

rise due to the overall positive sentiment.

fall since investors expect a higher return.

rise since banks invest their increased profits.

fall in anticipation of a reversal in the interest rate cycle.

NEW QUESTION 46
Which one of the following statements is correct about using judgement in the financial reporting process?

Accountants should not be allowed to use their own judgement.

A true and fair view cannot be assured if individual judgement is allowed.

Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.

Use of individual judgement is required to choose between alternative methods available within accounting standards.

NEW QUESTION 47
Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?

allocative efficiency

strong form efficiency

semi-strong form efficiency

information processing efficiency

NEW QUESTION 48
In a stock market that displays strong efficiency, share prices reflect all available

public information.

public and inside information.

information about future expansion plans.

information about past changes in share prices.

NEW QUESTION 49
Which one of the following statements is correct?

Australian accounting standards are based on the US GAAP.

Accounting standards prescribe the possible accounting treatments.

Accounting standards are developed and maintained using a consultative process with the OECD.

Accounting standards provide the basic knowledge upon which the conceptual framework is developed.

NEW QUESTION 50
According to the Australian Accounting Standards Board, which one of the following is a benefit of adopting International Financial Reporting Standards (IFRSs)?

to increase foreign investors’ understanding of local financial reports

to enable the national government to control activities of foreign multinationals

to make it easier for tax authorities to calculate taxes on investors’ overseas income

to become a resource for developing nations who can easily adopt IFRSs as a full set of standards

NEW QUESTION 51
Liquidity of a company is based on its ability to

buy back shares.

meet long term commitments.

pay dividends to shareholders.

meet short term commitments.

NEW QUESTION 52
An example of voluntary reporting in Australia is a

sustainability report.

statement of cash flows.

statement of financial position.

statement of comprehensive income.

NEW QUESTION 53
In relation to financial statements, the ‘true and fair override’ indicates that

statements need not always be true and accurate.

accounting standards must be complied with under all circumstances.

the true and fair requirement need not be complied with by certain industries.

departure is allowed from accounting standards under specific instances to show a fair presentation.

NEW QUESTION 54
Which one of the following statements is correct?

Liabilities are future obligations that will cause outflow of resources embodying economic benefits.

Current and non-current assets are shown as separate classifications in the statement of financial position.

Assets used for long-term operations are shown under working capital in the statement of financial position.

A statement of financial position explains the reasons for movement of assets and liabilities through the accounting period.

NEW QUESTION 55
Which one of the following statements is correct in relation to presenting the financial position of an entity?

Liquidity represents cash holdings, while solvency is long-term profitability.

Liquidity is the ability to repay long-term financial commitments, whereas solvency is the ability to repay short-term commitments.

Solvency is the availability of cash over the long-term, while liquidity is the availability of funds over the short-term to meet financial commitments as they fall due.

Solvency is the availability of total assets over a long-term, while liquidity is the availability of total assets over the short-term to meet financial commitments as they fall due.
.

NEW QUESTION 56
The concept of transparency in corporate governance means that listed companies should disclose

their future strategy.

confidential issues relating to competitors.

material information that affects decisions.

only mandatory information by management.

NEW QUESTION 57
Which one of the following would be included in the statement of financial position?

depreciation

deferred tax

distribution costs

gains on property valuations

NEW QUESTION 58
The ability of a company to pay its bills when and as they fall due is a measure of

solvency.

economic value.

compliance with the conceptual framework.

the true and fair view of the financial report.

NEW QUESTION 59
The IASB evaluates the merits of adding a potential item to its agenda mainly by reference to the needs of

investors.

suppliers.

tax agencies.

regulatory authorities.

NEW QUESTION 60
An agent is answerable under the contract to the agent’s principal and must account for the resources of the agent’s principal and the money the agent has gained working on the principal’s behalf. In the context of agency, this definition describes an agent’s

contract.

relationship.

fiduciary duty.

accountability.

NEW QUESTION 61
Which one of the following statements regarding the IASB’s Conceptual Framework for Financial Reporting is correct?

It overrides any local or international accounting standard.

It specifies the concepts that underlie the preparation and presentation of special purpose financial statements.

It specifies the concepts that underlie the preparation and presentation of general purpose financial statements.

It specifies the concepts that underlie the preparation and presentation of only consolidated financial statements.

NEW QUESTION 62
Which one of the following methods is not used for ‘creative accounting’?

profit smoothing

window dressing

off balance sheet financing

aggressive debt management

NEW QUESTION 63
PLO Advertising Ltd (PLO) buys a new stretch limousine for $40 000. A number of individuals have expressed an interest in buying the limousine from PLO for $60 000. The board members decide that the limousine is worth between $65 000 and $70 000. What is the fair value of the limousine?

$40 000

$60 000

$65 000

$70 000

NEW QUESTION 64
According to the IASB’s Conceptual Framework, the key reason general purpose financial statements are produced is to satisfy the information needs of

employees.

management.

internal users.

capital providers.

NEW QUESTION 65
A rules-based approach to standard setting

provides a broad framework for standard setting.

helps a standard-setting body to prioritise matters.

prescribes standards that attempt to cover all eventualities a business may face.

ensures there are no conflicts within accounting standards as each issue is handled just once.

NEW QUESTION 66
What is the difference between positive and normative accounting theories?

Positive accounting theory explains what should occur.

Normative accounting theory specifies the prediction rules for items.