Free Jul-2022 Financial-Accounting-and-Reporting Certification Sample Questions certification Exam [Q10-Q27]

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Free Jul-2022 Financial-Accounting-and-Reporting Certification Sample Questions certification Exam

Certification Topics of Financial-Accounting-and-Reporting Exam PDF Recently Updated Questions

Q10. Historical cost accounting provides financial information that is

relevant for decision making.

relevant and reliable for decision making.

relevant but may not be reliable for decision making.

reliable but may not be relevant for decision making.

Q11. Which one of these is a key principle of good corporate governance?

effective communication with shareholders

restriction of shareholders’ rights in decision-making

effective management of the employees of the company

non-disclosure of directors’ agency relationship with the company

Q12. Which one of the following is not an advantage of accounting regulation?

It provides quality of information in and across financial statements.

It provides flexibility in the way accounting information is presented to users.

It provides the required accounting information to all necessary shareholders.

It instils public confidence in the accounting system employed in commerce and industry.

Q13. Which one of the following practices is not considered creative accounting?

profit smoothing

window dressing

trading in derivatives

aggressive earnings management

Q14. The Framework for the Preparation and Presentation of Financial Statements which assists the development of the International Financial Reporting Standards (IFRS) was originally approved by the

IFRS Interpretations Committee (IFRIC).

International Federation of Accountants (IFAC).

International Accounting Standards Board (IASB).

International Accounting Standards Committee (IASC).

Q15. The two fundamental qualitative characteristics of the financial information are

verifiability and relevance.

relevance and comparability.

relevance and faithful representation.

faithful representation and comparability.

Q16. In a strong efficient market, the finance manager will

analyse historical data on takeover targets.

maximise the net present value of the firm’s investments.

develop strategies to disclose the company’s profit or loss.

employ analysts to determine the best time to issue shares.

Q17. Which one of the following includes social reporting guidelines?

Global Reporting Initiative (GRI)

International Accounting Standards (IAS)

Generally Accepted Accounting Principles (GAAP)

International Financial Reporting Standards (IFRS)

Q18. The use of the principle of substance over form is found in which one of the following accounting treatments?

accounting for inventories

accounting for finance leases

accounting for non-current assets

accounting for property, plant and equipment

Q19. 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

Q20. 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

Q21. 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?

potential investors in the company

governments and regulatory bodies

a company’s executive management

members of the public who have small investment holdings in the company

Q22. 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.

I and III only

I and IV only

II and III only

III and IV only

Q23. Restrictions on the scope of a specific accounting standard are stated in

that specific standard.

the IASB’s Conceptual Framework.

the explanatory materials provided by the AASB.

various Statements of Accounting Concepts (SACs) issued by the AASB.

Q24. Which one of the following would be included in a statement of financial position?

cost of sales

finance costs

retained earnings

proceeds from long term borrowings

Q25. 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

Q26. 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.

Q27. Variations in the regulatory regime over financial reporting in different countries is attributable to a range of differences including

company structures, ownership, local culture and the level of development of the country.

the needs of investors, creditors, employees, lending institutions and taxation authorities.

consumer laws, taxation requirements and the extent to which the country has adopted international financial reporting standards.

the extent to which the country has adopted international financial reporting standards and the requirements of local securities exchange.

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Free Jul-2022 Financial-Accounting-and-Reporting Certification Sample Questions certification Exam [Q10-Q27]

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