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CPA Australia CPA Foundation Program Financial-Accounting-and-Reporting

Financial-Accounting-and-Reporting

Exam Code: Financial-Accounting-and-Reporting

Exam Name: CPA Financial Accounting and Reporting Exam

Updated: Jun 12, 2026

Q & A: 100 Questions and Answers

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CPA Australia CPA Financial Accounting and Reporting Sample Questions:

1. A statement of comprehensive income reports on

A) changes in financial position.
B) financial performance.
C) solvency.
D) financial position.


2. Which one of the following would be recognised in the statement of profit or loss and other comprehensive income?

A) employee wages
B) prepayment of expenses
C) inventory
D) retained earnings


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

A) depreciation
B) deferred tax
C) gains on property valuations
D) distribution costs


4. The concept of transparency in corporate governance means that listed companies should disclose

A) their future strategy.
B) material information that affects decisions.
C) confidential issues relating to competitors.
D) only mandatory information by management.


5. Which one of the following statements is correct in relation to presenting the financial position of an entity?

A) Liquidity is the ability to repay long-term financial commitments, whereas solvency is the ability to repay short-term commitments.
B) Solvency is the availability of cash over the long-term, while liquidity is the availability of funds over the short-term to meet financial commitments as they fall due.
C) Liquidity represents cash holdings, while solvency is long-term profitability.
D) Solvency is the availability of total assets over a long-term, while liquidity is the availability of total assets over the short-term to meet financial commitments as they fall due.
.


Solutions:

Question # 1
Answer: B
Question # 2
Answer: A
Question # 3
Answer: B
Question # 4
Answer: B
Question # 5
Answer: B

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