[Jan 31, 2023] Fully Updated Dumps PDF - Latest Financial-Accounting-and-Reporting Exam Questions and Answers
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NEW QUESTION 23
The use of the principle of substance over form is found in which one of the following accounting treatments?
- A. accounting for finance leases
- B. accounting for inventories
- C. accounting for property, plant and equipment
- D. accounting for non-current assets
Answer: A
NEW QUESTION 24
Liquidity of a company is based on its ability to
- A. meet short term commitments.
- B. pay dividends to shareholders.
- C. meet long term commitments.
- D. buy back shares.
Answer: A
NEW QUESTION 25
Which one of the following statements is not correct in respect of manual accounting systems?
- A. Risk of error is greater and the quality of outputs is inferior.
- B. They are bulky to store compared to computer systems.
- C. Productivity in manual systems is lower than computer systems.
- D. It is easy to make corrections.
Answer: D
NEW QUESTION 26
In a stock market that displays strong efficiency, share prices reflect all available
- A. information about past changes in share prices.
- B. public and inside information.
- C. public information.
- D. information about future expansion plans.
Answer: B
NEW QUESTION 27
Which one of the following best describes the objective of the International Financial Reporting Standards (IFRS) Foundation?
- A. to guide investors who compare the financial statements of one entity in one country with those of another entity located elsewhere
- B. to co-ordinate the accounting profession on a global scale by issuing and establishing international standards
- C. to promote the application, convergence and use of International Financial Reporting Standards (IFRS) as a high quality reporting solution
- D. to develop an International regulatory framework in the national jurisdictions of countries that produce accountants
Answer: C
NEW QUESTION 28
Which one of the following examples would not represent an agency cost?
- A. the cost of preparing a financial report for shareholders
- B. the cost of employing an internal auditor
- C. the cost of engaging an external auditor
- D. the cost of preparing a cost-benefit report for a new project
Answer: D
NEW QUESTION 29
A statement of comprehensive income reports on
- A. financial performance.
- B. solvency.
- C. changes in financial position.
- D. financial position.
Answer: A
NEW QUESTION 30
An example of voluntary reporting in Australia is a
- A. statement of cash flows.
- B. statement of comprehensive income.
- C. sustainability report.
- D. statement of financial position.
Answer: C
NEW QUESTION 31
The International Accounting Standards Board's Conceptual Framework for Financial Reporting for the preparation and presentation of financial statements is concerned with the information needs of most users, but not for each possible user.
Which one of the following stakeholders would not be one of the users that the Conceptual Framework is concerned about?
- A. a company's executive management
- B. potential investors in the company
- C. members of the public who have small investment holdings in the company
- D. governments and regulatory bodies
Answer: A
NEW QUESTION 32
What is the difference between positive and normative accounting theories?
- A. Normative accounting theory predicts what is expected to occur rather than explaining what should occur.
- B. Normative accounting theory explains what should occur instead of predicting what is expected to occur.
- C. Positive accounting theory explains what should occur.
- D. Normative accounting theory specifies the prediction rules for items.
Answer: B
NEW QUESTION 33
Which accounting theory is best described by the statement 'An approach to accounting is one where a theory is thought of as a body of knowledge that explains and attempts to predict actual accounting practice'?
- A. general accounting theory
- B. positive accounting theory
- C. normative accounting theory
- D. historical cost accounting theory
Answer: B
NEW QUESTION 34
Published financial statements are regulated by
- A. accounting and legal rules to ensure the provision of relevant and reliable financial information to shareholders.
- B. shareholders who specify the framework for the provision of consistent and comparable financial information for decision-making.
- C. International Financial Reporting Standards to ensure the provision of useful financial information to shareholders.
- D. rules to ensure the provision of consistent financial information to investors.
Answer: A
NEW QUESTION 35
Financial markets have achieved operational efficiency when
- A. past records are used to predict the future prices of goods.
- B. the price of stocks and shares are available accurately and quickly.
- C. the costs of financial transactions are kept as low as possible.
- D. the cost of transactions is a reflection of the actual cost incurred.
Answer: C
NEW QUESTION 36
Which one of the following financial statements helps provide information about factors that might affect an entity's liquidity or solvency?
- A. notes to the financial statements
- B. statement of changes in equity
- C. statement of profit or loss and other comprehensive income
- D. statement of cash flows
Answer: D
NEW QUESTION 37
Variations in the regulatory regime over financial reporting in different countries is attributable to a range of differences including
- A. the needs of investors, creditors, employees, lending institutions and taxation authorities.
- B. the extent to which the country has adopted international financial reporting standards and the requirements of local securities exchange.
- C. consumer laws, taxation requirements and the extent to which the country has adopted international financial reporting standards.
- D. company structures, ownership, local culture and the level of development of the country.
Answer: D
NEW QUESTION 38
Which one of the following is an objective of the International Federation of Accountants (IFAC)?
- A. to provide advice on accounting standards to the OECD
- B. to issue new international financial reporting standards (IFRS)
- C. to establish high quality professional standards in accountancy
- D. to provide direction to the Financial Accounting Standards Board (FASB)
Answer: C
NEW QUESTION 39
Which of the following are the stated objectives of the International Accounting Standards Board (IASB)?
I)Enforce accounting standards.
II)Develop accounting standards.
III)Work for convergence of accounting standards.
- A. III only
- B. II and III only
- C. I and II only
- D. I only
Answer: B
NEW QUESTION 40
LMN Ltd recently changed the measurement base for their assets. They should I)treat this like a change in an estimate.
II)treat this like a change in the accounting policy.
III)disclose this in the notes to financial statements.
- A. III only
- B. II and III only
- C. I and III only
- D. I only
Answer: B
NEW QUESTION 41
Financial information is reliable if it
I)prefers substance over legal form.
II)is neutral and without any material error.
III)is complete and has been made with prudence.
IV)is understandable to those with no knowledge of accounting.
- A. II, III and IV only
- B. I, II and III only
- C. I, III and IV only
- D. I, II and IV only
Answer: B
NEW QUESTION 42
Restrictions on the scope of a specific accounting standard are stated in
- A. the IASB's Conceptual Framework.
- B. the explanatory materials provided by the AASB.
- C. that specific standard.
- D. various Statements of Accounting Concepts (SACs) issued by the AASB.
Answer: C
NEW QUESTION 43
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