Steps Necessary To Pass The Financial-Accounting-and-Reporting Exam from Training Expert ExamsTorrent [Q25-Q39]

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Steps Necessary To Pass The Financial-Accounting-and-Reporting Exam from Training Expert ExamsTorrent

Valid Way To Pass CPA Foundation Program’s Financial-Accounting-and-Reporting Exam

NEW QUESTION 25
To be relevant, financial information has to
I)be provided in a timely manner.
II)comply with the going concern assumption.
III)have predictive and/or confirmatory value.
IV)exclude computations that are difficult to understand.

I and II only

I and III only

II and III only

III and IV only

NEW QUESTION 26
In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of

national company law and national accounting standards.

national company law and local stock exchange requirements.

national company law, national accounting standards and local stock exchange requirements.

company law, accounting standards, local stock exchange requirements and international accounting standards.

NEW QUESTION 27
Which one of these is a disadvantage of a conceptual framework?

It replaces the established principles.

It mandates the formats of various financial statements.

A single framework is not suitable for all users of financial statements.

It increases the chances of political interference in the development of accounting standards.

NEW QUESTION 28
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 29
A decrease in assets is most likely to be recognised in the financial report as

a liability.

an expense.

revenue earned.

a change in equity.

NEW QUESTION 30
Which of the following represents a principal-agent relationship?
I.
shareholders-auditors
II.
shareholders-management
III.
security exchange-company
IV.
board of directors-employees

I, II and III only

I, II and IV only

II, III and IV only

I, II, III and IV

NEW QUESTION 31
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 32
Which one of the following best describes the objective of the International Financial Reporting Standards (IFRS) Foundation?

to co-ordinate the accounting profession on a global scale by issuing and establishing international standards

to develop an International regulatory framework in the national jurisdictions of countries that produce accountants

to guide investors who compare the financial statements of one entity in one country with those of another entity located elsewhere

to promote the application, convergence and use of International Financial Reporting Standards (IFRS) as a high quality reporting solution

NEW QUESTION 33
Which one of these concepts suggests that stock prices react to new information almost instantly?

market power

efficient market

bargaining power

incentive substitution

NEW QUESTION 34
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 35
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

NEW QUESTION 36
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 37
According to IASB’s Conceptual Framework, an expense is a decrease in economic benefits in the form of
I.
outflows.
II.
decreases of assets.
III.
incurrences of liabilities.
IV.
contributions to equity holders.

I, II and III only

I, II and IV only

I, III and IV only

II, III and IV only

NEW QUESTION 38
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.

NEW QUESTION 39
Which one of the following bodies makes accounting standards in Australia?

ASIC

FRC