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CPA Australia CPA Financial Accounting and Reporting Sample Questions:
1. Which one of these concepts suggests that stock prices react to new information almost instantly?
A) efficient market
B) bargaining power
C) market power
D) incentive substitution
2. Which one of the following is an accurate definition of fair value of an asset?
A) The price for which an asset could be sold in an orderly transaction between market participants at the measurement date.
B) The price for which an asset could be sold net of disposal costs.
C) The amount yet to be written off over the remainder of the asset's useful life.
D) The cost of replacing an asset with an identical item.
3. 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.
4. In the context of a regulatory framework, a principles-based system
A) attempts to cover specific eventualities.
B) is a rule-driven approach.
C) provides a theoretical basis with broad terms of reference.
D) removes any element of judgement by providing clear requirements.
5. 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.
Solutions:
Question # 1 Answer: A | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: C | Question # 5 Answer: C |