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PASS RATE CPA Foundation Program Financial-Accounting-and-Reporting Certified Exam DUMP
NEW QUESTION 56
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
- A. relationship.
- B. contract.
- C. fiduciary duty.
- D. accountability.
Answer: D
NEW QUESTION 57
Which one of the following describes the key advantage of the manual system of accounting?
- A. Processing is maintained at a reasonable speed even while dealing with large volumes of data.
- B. A thorough understanding of the business can be gained through it.
- C. Corrections are easily managed as updating or recreating the whole document is not difficult.
- D. The quality of output is not necessarily an issue.
Answer: B
NEW QUESTION 58
Which one of the following includes social reporting guidelines?
- A. Global Reporting Initiative (GRI)
- B. Generally Accepted Accounting Principles (GAAP)
- C. International Accounting Standards (IAS)
- D. International Financial Reporting Standards (IFRS)
Answer: A
NEW QUESTION 59
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.
Answer: A
NEW QUESTION 60
Published financial statements are regulated by
- A. shareholders who specify the framework for the provision of consistent and comparable financial information for decision-making.
- B. accounting and legal rules to ensure the provision of relevant and reliable financial information to shareholders.
- 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: B
NEW QUESTION 61
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.
- A. III and IV only
- B. I and III only
- C. II and III only
- D. I and IV only
Answer: D
NEW QUESTION 62
Which one of the following situations would result in either a new liability being recognised or an existing liability being increased?
- A. A company pays only half of an overdue invoice.
- B. At the end of the reporting period, there are unpaid wages.
- C. A company establishes an asset revaluation reserve.
- D. A company recognises the depreciation expense for the current period.
Answer: B
NEW QUESTION 63
Which one of the following statements is correct?
- A. Accounting standards prescribe the possible accounting treatments.
- B. Accounting standards are developed and maintained using a consultative process with the OECD.
- C. Accounting standards provide the basic knowledge upon which the conceptual framework is developed.
- D. Australian accounting standards are based on the US GAAP.
Answer: A
NEW QUESTION 64
Variations in the regulatory regime over financial reporting in different countries is attributable to a range of differences including
- A. consumer laws, taxation requirements and the extent to which the country has adopted international financial reporting standards.
- B. the needs of investors, creditors, employees, lending institutions and taxation authorities.
- C. the extent to which the country has adopted international financial reporting standards and the requirements of local securities exchange.
- D. company structures, ownership, local culture and the level of development of the country.
Answer: D
NEW QUESTION 65
The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal, refers to which basis of measurement?
- A. realisable value
- B. current cost
- C. present value
- D. historical cost
Answer: A
NEW QUESTION 66
A company's financial report is compliant with International Financial Reporting Standards. Where in the report would an investor find the amount of money received by the company for investment activities?
- A. statement of financial position
- B. statement of changes in equity
- C. statement of cash flows
- D. statement of comprehensive income
Answer: C
NEW QUESTION 67
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. positive accounting theory
- B. normative accounting theory
- C. general accounting theory
- D. historical cost accounting theory
Answer: A
NEW QUESTION 68
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.
- A. III and IV only
- B. I and II only
- C. II and III only
- D. I and III only
Answer: D
NEW QUESTION 69
Venturer Ltd has received fees from venture capital activities and has engaged you as the accountant to prepare the financial report for 31 December 20X0. Unable to find a specific reference to venture capital fees in either the conceptual framework or the accounting standards, you establish the appropriate accounting treatment by
- A. using your professional judgment and referring to the conceptual framework's definitions and recognition criteria.
- B. using your professional judgment and referring to generally accepted accounting principles and practice.
- C. consulting with the International Accounting Standards Board.
- D. referring to the fundamental accounting assumptions and conventions.
Answer: A
NEW QUESTION 70
X was influenced by G Co's audit report and dividend declaration, and decided to invest in the securities of the company. What should X be cautious about before investing in the shares of the company?
X should be aware that
- A. the auditor's report refers to the company's prior year financials.
- B. the declaration of dividends assures high earnings per share.
- C. a declaration of dividend is the ultimate measure of a company's profitability.
- D. the auditor's report is influenced by the directors.
Answer: A
NEW QUESTION 71
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