CFAS CHAPTER 1-7 (BUSINESS
ACCOUNTANT) EXAM QUESTIONS
WITH CORRECT ANSWERS 2025
Conceptual Framework - Answer-The___ is intended to guide standard setters,
preparers and users of financial information in the preparation and presentation of
statements.
Conceptual Frmework - Answer-The __ is the underlying theory for the development
of accounting standards and revision of previously issued. It will be used in future
standard setting decision but no changes are made to the current IFRS
Purposes of Revised Conceptual Framework - Answer-a. To assist the International
Accounting Standards Board to develop IF'RS Standards based on consistent
concepts.
b. To assist preparers of financial statements to develop consistent accounting policy
when no Standard applies to a particular transaction or other event or where an
issue is not yet addressed by an IFRS.
To assist preparers of financial statements to develop accounting policy when a
Standard allows a choice of an accounting policy.
d. To assist all parties to understand and interpret the IFRS Standards.
the Conceptual Framework - Answer-In other words, ____ describes the concepts
for general purpose financial reporting.
a. Primary users
b. Other users - Answer-Under the Conceptual Framework for Financial Reporting,
the users of financial information may be classified into two, namely:
primary users - Answer-The __ include the existing and potential investors, lenders
and other creditors.
other users - Answer-The___ include the employees, customers, governments and
their agencies, and the public.
primary users - Answer-The ___ of financial information are the parties to whom
general purpose financial reports are primarily directed.
Existing and potential investors - Answer-are concerned with the risk inherent in and
return provided by their investments.
Shareholders - Answer-are also interested in information which enables them to
assess the ability of the entity to pay dividends.
Existing and potential lenders and other creditors - Answer-are interested in
information which enables them to determine whether their loans, interest thereon
and other amounts owing to them will be paid when due.
,Other users - Answer-By residual definition, other users are users of financial
information other than the existing and potential investors, lenders and other
creditors.
Other users - Answer-are so called because they are parties that may find the
general purpose financial reports useful but the reports are not directed to them
primarily.
Employees - Answer-are interested in information about the stability and profitability
of the entity.
employees - Answer-They are interested in information which enables them to
assess the ability of the entity to provide remuneration, retirement benefits and
employment opportunities.
Customers - Answer-have an interest in information about the continuance of an
entity especially when they have a long-term involvement with or are dependent on
the entity.
Governments and their agencies - Answer-are interested in the allocation of
resources and therefore the activities of the entity.
Governments and their agencies - Answer-These users require information to
regulate the activities of the entity, determine taxation policies and as a basis for
national income and similar statistics.
Public - Answer-Entities affect members of the public in a variety of ways. for
example, entities make substantial contribution to the local economy in many ways
including the number of people they employ and their patronage of local supphers.
Financial statements may assist the ___ by providing information about the trend
and the range of its activities.
Revised Conceptual Framewors - Answer-1. Objective of financial reporting
2. Qualitative characteristics of useful financial information
3. Financial statements and reporting entity
4. Elements of financial statements
5. Recognition and derecognition
6. Measurement
7. Presentation and disclosure
8. Concepts of capital and capital maintenance
OBJECTIVE OF FINANCIAL REPORTING - Answer-forms the foundation of the
Conceptual Framework.
The overall objective of financial reporting - Answer-is to provide financial information
about the reporting entity that is useful to existing and potential investors, lenders
and other creditors in making decisions about providing resources to the entity.
, Financial reporting - Answer-___ is the provision of financial information about an
entity to external users that is useful to them in making economic decisions and for
assessing the effectiveness of the entity's management.
annual financial statements - Answer-The principal way of providing financial
information to external users is through the ___
nonfinancial information - Answer-Financial reports also include ___ such as
description of major products and a listing of corporate officers and directors.
Financial reporting - Answer-is directed primarily to the existing and potential
investors, lenders and other creditors which compose the primary user group.
Specific objectives of financial reporting - Answer-a. To provide information useful in
making decisions about providing resources to the entity.
b. To provide information useful in assessing the cash flow prospects of the entity.
c. To provide information about entity resources, claims and changes in resources
and claims.
Economic decisions - Answer-Existing and potential investors need general purpose
financial reports in order to enable them in making decisions whether to buy, sell or
hold equity investments.
Existing and potential lenders and other creditors need general purpose financial
reports in order to enable them in making decisions whether to provide or settle
loans and other forms of credit.
Assessing cash flow prospects - Answer-Decisions by existing and potential
investors about buying, selling or holding equity instruments depend on the returns
that they expect from an investment, for example, dividends.
Similarly, decisions by existing and potential lenders and other creditors about
providing or settling loans and other forms of credit depend on the principal and
interest payments or other returns that they expect.
Economic resources and claims - Answer-General purpose financial reports provide
information about the financial position of a reporting entity.
Financial position - Answer-is information about the entity's economic resources and
the claims against the reporting entity.
financial position - Answer-the ___ comprises the assets, liabilities and equity of an
entity at a particular moment in time.
Liquidity - Answer-is the availability of cash in the near future to cover currently
maturing obligations.
Solvency - Answer-is the availability of cash over a long term to meet financial
commitments when they fall due.
ACCOUNTANT) EXAM QUESTIONS
WITH CORRECT ANSWERS 2025
Conceptual Framework - Answer-The___ is intended to guide standard setters,
preparers and users of financial information in the preparation and presentation of
statements.
Conceptual Frmework - Answer-The __ is the underlying theory for the development
of accounting standards and revision of previously issued. It will be used in future
standard setting decision but no changes are made to the current IFRS
Purposes of Revised Conceptual Framework - Answer-a. To assist the International
Accounting Standards Board to develop IF'RS Standards based on consistent
concepts.
b. To assist preparers of financial statements to develop consistent accounting policy
when no Standard applies to a particular transaction or other event or where an
issue is not yet addressed by an IFRS.
To assist preparers of financial statements to develop accounting policy when a
Standard allows a choice of an accounting policy.
d. To assist all parties to understand and interpret the IFRS Standards.
the Conceptual Framework - Answer-In other words, ____ describes the concepts
for general purpose financial reporting.
a. Primary users
b. Other users - Answer-Under the Conceptual Framework for Financial Reporting,
the users of financial information may be classified into two, namely:
primary users - Answer-The __ include the existing and potential investors, lenders
and other creditors.
other users - Answer-The___ include the employees, customers, governments and
their agencies, and the public.
primary users - Answer-The ___ of financial information are the parties to whom
general purpose financial reports are primarily directed.
Existing and potential investors - Answer-are concerned with the risk inherent in and
return provided by their investments.
Shareholders - Answer-are also interested in information which enables them to
assess the ability of the entity to pay dividends.
Existing and potential lenders and other creditors - Answer-are interested in
information which enables them to determine whether their loans, interest thereon
and other amounts owing to them will be paid when due.
,Other users - Answer-By residual definition, other users are users of financial
information other than the existing and potential investors, lenders and other
creditors.
Other users - Answer-are so called because they are parties that may find the
general purpose financial reports useful but the reports are not directed to them
primarily.
Employees - Answer-are interested in information about the stability and profitability
of the entity.
employees - Answer-They are interested in information which enables them to
assess the ability of the entity to provide remuneration, retirement benefits and
employment opportunities.
Customers - Answer-have an interest in information about the continuance of an
entity especially when they have a long-term involvement with or are dependent on
the entity.
Governments and their agencies - Answer-are interested in the allocation of
resources and therefore the activities of the entity.
Governments and their agencies - Answer-These users require information to
regulate the activities of the entity, determine taxation policies and as a basis for
national income and similar statistics.
Public - Answer-Entities affect members of the public in a variety of ways. for
example, entities make substantial contribution to the local economy in many ways
including the number of people they employ and their patronage of local supphers.
Financial statements may assist the ___ by providing information about the trend
and the range of its activities.
Revised Conceptual Framewors - Answer-1. Objective of financial reporting
2. Qualitative characteristics of useful financial information
3. Financial statements and reporting entity
4. Elements of financial statements
5. Recognition and derecognition
6. Measurement
7. Presentation and disclosure
8. Concepts of capital and capital maintenance
OBJECTIVE OF FINANCIAL REPORTING - Answer-forms the foundation of the
Conceptual Framework.
The overall objective of financial reporting - Answer-is to provide financial information
about the reporting entity that is useful to existing and potential investors, lenders
and other creditors in making decisions about providing resources to the entity.
, Financial reporting - Answer-___ is the provision of financial information about an
entity to external users that is useful to them in making economic decisions and for
assessing the effectiveness of the entity's management.
annual financial statements - Answer-The principal way of providing financial
information to external users is through the ___
nonfinancial information - Answer-Financial reports also include ___ such as
description of major products and a listing of corporate officers and directors.
Financial reporting - Answer-is directed primarily to the existing and potential
investors, lenders and other creditors which compose the primary user group.
Specific objectives of financial reporting - Answer-a. To provide information useful in
making decisions about providing resources to the entity.
b. To provide information useful in assessing the cash flow prospects of the entity.
c. To provide information about entity resources, claims and changes in resources
and claims.
Economic decisions - Answer-Existing and potential investors need general purpose
financial reports in order to enable them in making decisions whether to buy, sell or
hold equity investments.
Existing and potential lenders and other creditors need general purpose financial
reports in order to enable them in making decisions whether to provide or settle
loans and other forms of credit.
Assessing cash flow prospects - Answer-Decisions by existing and potential
investors about buying, selling or holding equity instruments depend on the returns
that they expect from an investment, for example, dividends.
Similarly, decisions by existing and potential lenders and other creditors about
providing or settling loans and other forms of credit depend on the principal and
interest payments or other returns that they expect.
Economic resources and claims - Answer-General purpose financial reports provide
information about the financial position of a reporting entity.
Financial position - Answer-is information about the entity's economic resources and
the claims against the reporting entity.
financial position - Answer-the ___ comprises the assets, liabilities and equity of an
entity at a particular moment in time.
Liquidity - Answer-is the availability of cash in the near future to cover currently
maturing obligations.
Solvency - Answer-is the availability of cash over a long term to meet financial
commitments when they fall due.
