CPA LICENCE EXAMINATION 2023 QUESTIONS AND
ANSWERS
(276 Questions)
The Exam has FOUR Sections:
Auditing and Attestation (AUD)
Financial Accounting and Reporting (FAR)
Regulation (REG)
Business Environment and Concepts (BEC
,1. Which of the following financial statements is used to show the financial position of a company
at a specific point in time?
A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
Answer: C
2. What is the purpose of a statement of comprehensive income?
A. To show the changes in equity during a period
B. To show the net income or loss of a company during a period
C. To show the changes in cash flows during a period
D. To show the overall income or loss of a company during a period, including non-operating
items
Answer: D
3. What is the purpose of the International Accounting Standards Board (IASB)?
A. To set accounting standards for governmental entities
B. To set accounting standards for non-profit organizations
C. To set accounting standards for publicly traded companies
D. To set accounting standards for all types of organizations around the world
Answer: D
4. Which of the following is an example of a source document?
A. A bank statement
B. A trial balance
, C. A journal entry
D. An invoice
Answer: D
5. Which of the following is a role of the Financial Accounting Standards Board (FASB)?
A. Enforcing accounting standards for publicly traded companies
B. Setting accounting standards for non-profit organizations
C. Setting accounting standards for governmental entities
D. Setting accounting standards for all types of organizations in the United States
Answer: D
6. Which of the following financial statements shows the change in retained earnings during a
period? A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
Answer: D
7. Which of the following organizations is responsible for setting accounting standards for
governmental entities?
A. Financial Accounting Standards Board (FASB)
B. International Accounting Standards Board (IASB)
C. Governmental Accounting Standards Board (GASB)
D. U.S. Securities and Exchange Commission (SEC)
Answer: C
, 8. Which of the following is a role of the U.S. Securities and Exchange Commission (SEC)?
A. Setting accounting standards for all types of organizations in the United States
B. Enforcing accounting standards for publicly traded companies
C. Setting accounting standards for non-profit organizations
D. Setting accounting standards for governmental entities
Answer: B
9. Which of the following financial statements shows the cash inflows and outflows for a period?
A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
Answer: B
10. Which of the following is an example of a general ledger?
A. Accounts payable ledger
B. Accounts receivable ledger
C. Cash receipts ledger
D. Asset ledger
Answer: D
11. Which of the following is an example of a contra account?
A. Accounts payable
ANSWERS
(276 Questions)
The Exam has FOUR Sections:
Auditing and Attestation (AUD)
Financial Accounting and Reporting (FAR)
Regulation (REG)
Business Environment and Concepts (BEC
,1. Which of the following financial statements is used to show the financial position of a company
at a specific point in time?
A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
Answer: C
2. What is the purpose of a statement of comprehensive income?
A. To show the changes in equity during a period
B. To show the net income or loss of a company during a period
C. To show the changes in cash flows during a period
D. To show the overall income or loss of a company during a period, including non-operating
items
Answer: D
3. What is the purpose of the International Accounting Standards Board (IASB)?
A. To set accounting standards for governmental entities
B. To set accounting standards for non-profit organizations
C. To set accounting standards for publicly traded companies
D. To set accounting standards for all types of organizations around the world
Answer: D
4. Which of the following is an example of a source document?
A. A bank statement
B. A trial balance
, C. A journal entry
D. An invoice
Answer: D
5. Which of the following is a role of the Financial Accounting Standards Board (FASB)?
A. Enforcing accounting standards for publicly traded companies
B. Setting accounting standards for non-profit organizations
C. Setting accounting standards for governmental entities
D. Setting accounting standards for all types of organizations in the United States
Answer: D
6. Which of the following financial statements shows the change in retained earnings during a
period? A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
Answer: D
7. Which of the following organizations is responsible for setting accounting standards for
governmental entities?
A. Financial Accounting Standards Board (FASB)
B. International Accounting Standards Board (IASB)
C. Governmental Accounting Standards Board (GASB)
D. U.S. Securities and Exchange Commission (SEC)
Answer: C
, 8. Which of the following is a role of the U.S. Securities and Exchange Commission (SEC)?
A. Setting accounting standards for all types of organizations in the United States
B. Enforcing accounting standards for publicly traded companies
C. Setting accounting standards for non-profit organizations
D. Setting accounting standards for governmental entities
Answer: B
9. Which of the following financial statements shows the cash inflows and outflows for a period?
A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
Answer: B
10. Which of the following is an example of a general ledger?
A. Accounts payable ledger
B. Accounts receivable ledger
C. Cash receipts ledger
D. Asset ledger
Answer: D
11. Which of the following is an example of a contra account?
A. Accounts payable
