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a compilation of cpa review questions that can help aspiring student
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Theory of Accounts 1-5

12/5/2017

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1. Which of the following is an internal user of an entity's financial information?

a. board of directors
b. shareholder in the entity
c. holder of the entity's bond
d. creditor with long-term contracts with the entity

2. These users require information on risk and return on investment and hence an entity's ability to pay dividends.

a. investors
b. employees
c. lenders
d. customers

3. These users are interested in information about the profitability and stability of an entity in order to assess the ability of the entity to provide remuneration, retirement, benefits and employment opportunities

a. customers
b. the public
c. governments and their agencies
d. employees

4. These users are interested in information that enables them to determine whether amounts owing to them will be paid when due.

a. suppliers and trade creditors
b. lenders
c. banks
d. finance entities

5. These users are interested in information that enables them to assess whether an entity is able to repay loans and the related interest when the loans fall due.

a. lenders
b. borrowers
c. trade creditors
d. owners

6. These users are interested in information about the continuance of an entity, especially when they have a long-term involvement with or are dependent on the entity

a. customers
b. employees
c. trade unions
d. suppliers

7. These users are interested in information in order to regulate the activities of an entity, determine taxation policies and provide a basis for national statistics

a. governments and their agencies
b. major organization of users
c. bureau of internal revenue
d. department of finance

8. These users need information on trends and recent developments where an entity makes a substantial contribution to the local economy providing employment and using local suppliers

a. the public
b. government and their agencies
c. finance entities
d. private entities

9. The providers of risk capital and their advisers

I. Are concerned with the risk inherent in and return provided by their investments
II. Need information to help them determine whether they should buy or sell.

a. I only
b. II only
c. both I and II
d. neither I nor II

10. Which statement is correct regarding information needs

I. All information needs of users cannot be met by financial statements
II. As investors are providers of risk capital to the entity, the provision of financial statements that meet their needs will also meet most of the needs of other users that financial statements can satisfy.

a. I only
b. II only
c. both I and II
d. neither I nor II


Answer:
1. a
2. a
3. d
4. a
5. a
6. a
7. a
8. a
9. c
10. c



"Questions are lifted from the following sources: PHILCPA, AICPA, ACP, PAS, PFRS, IAS, IFRS



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