CPA BOARD QUESTIONS - Theory of Accounts 100
QUESTIONS AND CORRECT DETAILED ANSWERS///
ALL YOU NEED FOR CPA BOARD EXAM/.// 2025
General-purpose financial statements are the product of;
a. financial accounting
b. managerial accounting
c. both financial and managerial accounting
d. neither financial accounting nor managerial accounting - (answer)A
Which of the following statements is NOT an objective of financial reporting?
a. To provide information that is useful in investment and credit decisions.
b. To provide information about resources, claims against those resources and
changes in them.
c. To provide information on the liquidation value of an entity.
d. To provide information that is useful in assessing cash flow prospects. -
(answer)C
The purpose of the International Accounting Standards Board is to;
a. issue enforceable standards which regulate the financial reporting of
multinationals
b. develop a uniform currency in which the financial transactions of entities
throughout the world would be measured.
c. develop a single set of high quality IFRS.
,d. arbitrate accounting disputes between auditors and international entities. -
(answer)C
The underlying theme in the conceptual framework is;
a. Decision Usefulness
b. Understandability
c. Reliability
d. Comparability - (answer)A
The Conceptual Framework includes all of the following EXCEPT;
a. Objective of financial reporting
b. Supplementary information
c. Elements of financial statements
d. Qualitative characteristics of accounting information - (answer)B
Which of the following is a FUNDAMENTAL quality of useful accounting
information?
a. Conservatism
b. Comparability
c. Faithful Representation
d. Consistency - (answer)C
,In the Conceptual Framework, an enhancing qualitative characteristics is;
a. Predictive value
b. Free from error
c. Timeliness
d. Confirmatory value - (answer)C
Which of the following is not a basic element of financial statements?
a. Assets
b. Statement of financial position
c. Equity
d. Income - (answer)B
Which of the following is not a basic assumption underlying the financial
accounting structure?
a. Economic entity assumption
b. Going concern assumption
c. Periodicity assumption
d. Historical cost assumption - (answer)D
During the lifetime of an entity, accountants produce statements at artificial
points in time.
a. Objectivity
, b. Periodicity
c. Economic entity
d. Going concern - (answer)B
When is revenue generally recognized?
a. when cash is received
b. when the warranty expires
c. when production is completed
d. when sale occurs - (answer)D
Which of the following is NOT a required component of financial statements?
a. President's letter to shareholders
b. Statement of financial position
c. Income statement
d. Notes to financial statements - (answer)A
Under Philippine Financial Reporting Standards, notes to Financial Statements;
a. must be quantifiable
b. must qualify as an element
c. amplify or explain items presented in the main body of the financial statements
d. all of the above - (answer)D
QUESTIONS AND CORRECT DETAILED ANSWERS///
ALL YOU NEED FOR CPA BOARD EXAM/.// 2025
General-purpose financial statements are the product of;
a. financial accounting
b. managerial accounting
c. both financial and managerial accounting
d. neither financial accounting nor managerial accounting - (answer)A
Which of the following statements is NOT an objective of financial reporting?
a. To provide information that is useful in investment and credit decisions.
b. To provide information about resources, claims against those resources and
changes in them.
c. To provide information on the liquidation value of an entity.
d. To provide information that is useful in assessing cash flow prospects. -
(answer)C
The purpose of the International Accounting Standards Board is to;
a. issue enforceable standards which regulate the financial reporting of
multinationals
b. develop a uniform currency in which the financial transactions of entities
throughout the world would be measured.
c. develop a single set of high quality IFRS.
,d. arbitrate accounting disputes between auditors and international entities. -
(answer)C
The underlying theme in the conceptual framework is;
a. Decision Usefulness
b. Understandability
c. Reliability
d. Comparability - (answer)A
The Conceptual Framework includes all of the following EXCEPT;
a. Objective of financial reporting
b. Supplementary information
c. Elements of financial statements
d. Qualitative characteristics of accounting information - (answer)B
Which of the following is a FUNDAMENTAL quality of useful accounting
information?
a. Conservatism
b. Comparability
c. Faithful Representation
d. Consistency - (answer)C
,In the Conceptual Framework, an enhancing qualitative characteristics is;
a. Predictive value
b. Free from error
c. Timeliness
d. Confirmatory value - (answer)C
Which of the following is not a basic element of financial statements?
a. Assets
b. Statement of financial position
c. Equity
d. Income - (answer)B
Which of the following is not a basic assumption underlying the financial
accounting structure?
a. Economic entity assumption
b. Going concern assumption
c. Periodicity assumption
d. Historical cost assumption - (answer)D
During the lifetime of an entity, accountants produce statements at artificial
points in time.
a. Objectivity
, b. Periodicity
c. Economic entity
d. Going concern - (answer)B
When is revenue generally recognized?
a. when cash is received
b. when the warranty expires
c. when production is completed
d. when sale occurs - (answer)D
Which of the following is NOT a required component of financial statements?
a. President's letter to shareholders
b. Statement of financial position
c. Income statement
d. Notes to financial statements - (answer)A
Under Philippine Financial Reporting Standards, notes to Financial Statements;
a. must be quantifiable
b. must qualify as an element
c. amplify or explain items presented in the main body of the financial statements
d. all of the above - (answer)D
