100+ Free CPALE Practice Questions

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2026 Statistics

Key Facts: CPALE Exam

6 subjects

FAR, AFAR, MAS, Auditing, Taxation and RFBT make up the CPALE

PRC Board of Accountancy

About 450 items

Five subjects have 70 multiple-choice items each and RFBT has 100

PRC Board of Accountancy - CPALE format

3 days

The CPALE is conducted over three consecutive days, two subjects per day

PRC Board of Accountancy

75% average

Passing requires a general weighted average of at least 75%

Republic Act No. 9298

65% floor

No individual subject grade may be below 65% to pass

Republic Act No. 9298

Conditional at 4 of 6

Rating 75% or higher in at least four subjects gives a conditional status

Republic Act No. 9298, Section 16

About PHP 900

PRC examination fee paid through the LERIS online portal

Professional Regulation Commission

100

Free original practice questions in this bank

OpenExamPrep

The CPA Licensure Examination (CPALE) is the Philippine professional licensure exam for accountants, administered by the PRC Board of Accountancy under RA 9298. It is a single-best-answer multiple-choice exam covering six subjects - FAR, AFAR, MAS, Auditing, Taxation and RFBT - taken over three consecutive days, with about 450 items total (70 per subject, 100 for RFBT). Candidates pass with a general weighted average of at least 75% and no subject below 65%; a rating of 75% or higher in at least four subjects gives a conditional status with a two-year removal window. The exam uses PFRS/PAS, Philippine Standards on Auditing, the NIRC as amended by the TRAIN law, and Philippine business law. This 100-question bank provides original practice spread across all six subjects with worked explanations.

Sample CPALE Practice Questions

Try these sample questions to test your CPALE exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the Conceptual Framework for Financial Reporting adopted in the Philippines, which two qualitative characteristics are the fundamental qualitative characteristics of useful financial information?

A.Comparability and verifiability

B.Relevance and faithful representation

C.Timeliness and understandability

D.Materiality and prudence

Explanation: The two fundamental qualitative characteristics are relevance and faithful representation. Information must be relevant to decisions and faithfully represent what it purports to represent.

2An entity acquired equipment for PHP 2,000,000 on January 1, 2024. It has a useful life of 8 years and a residual value of PHP 200,000. Using the straight-line method under PAS 16, what is the carrying amount on December 31, 2025?

A.PHP 1,550,000

B.PHP 1,500,000

C.PHP 1,575,000

D.PHP 1,650,000

Explanation: Annual depreciation = (2,000,000 - 200,000) / 8 = 225,000. After two years, accumulated depreciation = 450,000. Carrying amount = 2,000,000 - 450,000 = 1,550,000.

3Under PFRS 16, when a lessee initially recognizes a right-of-use asset and a lease liability for a lease that is not short-term or low-value, the lease liability is initially measured at:

A.The total of all undiscounted lease payments over the term

B.The present value of the lease payments not yet paid, discounted at the rate implicit in the lease or the lessee's incremental borrowing rate

C.The fair value of the underlying asset

D.The sum of lease payments plus initial direct costs

Explanation: PFRS 16 requires the lessee to measure the lease liability at the present value of the lease payments not yet paid, discounted at the interest rate implicit in the lease if readily determinable, otherwise the lessee's incremental borrowing rate.

4A company reports profit attributable to ordinary shareholders of PHP 4,800,000 and has a weighted average of 1,200,000 ordinary shares outstanding. There are no dilutive securities. What is the basic earnings per share?

A.PHP 3.00

B.PHP 4.00

C.PHP 4.80

D.PHP 5.00

Explanation: Basic EPS under PAS 33 = profit attributable to ordinary shareholders / weighted average ordinary shares = 4,800,000 / 1,200,000 = PHP 4.00.

5Under PAS 2, inventories are measured at:

A.Cost only

B.The lower of cost and net realizable value

C.Net realizable value only

D.The lower of cost and fair value less costs to sell

Explanation: PAS 2 requires inventories to be measured at the lower of cost and net realizable value (NRV), where NRV is the estimated selling price less estimated costs of completion and costs to sell.

6An entity's accounts receivable balance is PHP 5,000,000. Aging indicates that 4% of receivables are estimated to be uncollectible. The allowance for doubtful accounts has an existing credit balance of PHP 60,000. What is the doubtful accounts expense for the period?

A.PHP 200,000

B.PHP 140,000

C.PHP 260,000

D.PHP 60,000

Explanation: Required ending allowance = 4% x 5,000,000 = 200,000. Since the allowance already has a 60,000 credit balance, the expense to record is 200,000 - 60,000 = 140,000.

7Under PAS 36, an asset is impaired when its carrying amount exceeds its recoverable amount. The recoverable amount is:

A.The higher of fair value less costs of disposal and value in use

B.The lower of fair value less costs of disposal and value in use

C.Value in use only

D.The carrying amount less accumulated depreciation

Explanation: Under PAS 36, recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. An impairment loss is recognized when carrying amount exceeds this recoverable amount.

8On July 1, 2025, an entity issued PHP 3,000,000 face value, 10% bonds at 98. Interest is payable annually. Using the straight-line method of amortizing discount over a 5-year term, what is the interest expense recognized for the six months ended December 31, 2025?

A.PHP 150,000

B.PHP 156,000

C.PHP 144,000

D.PHP 162,000

Explanation: Cash interest for 6 months = 3,000,000 x 10% x 6/12 = 150,000. Discount = 3,000,000 x 2% = 60,000 amortized over 5 years = 12,000 per year, or 6,000 for six months. Interest expense = 150,000 + 6,000 = 156,000.

9Under PAS 37, a provision is recognized only when which of the following conditions is NOT required?

A.A present obligation exists from a past event

B.It is probable that an outflow of resources will be required

C.The amount can be reliably estimated

D.The obligation is legally enforceable through a court

Explanation: PAS 37 recognizes a provision when there is a present obligation (legal or constructive) from a past event, an outflow is probable, and a reliable estimate can be made. A constructive obligation need not be legally enforceable through a court.

10Under PFRS 9, a financial asset held within a business model whose objective is to hold assets to collect contractual cash flows that are solely payments of principal and interest is measured at:

A.Fair value through profit or loss

B.Amortized cost

C.Fair value through other comprehensive income

D.Cost less impairment

Explanation: Under PFRS 9, a debt instrument held to collect contractual cash flows that are solely principal and interest (the SPPI test) under a hold-to-collect business model is measured at amortized cost.

About the CPALE Exam

The CPA Licensure Examination (CPALE) is the national professional licensure examination administered by the Professional Regulation Commission (PRC) through the Board of Accountancy under Republic Act No. 9298, the Philippine Accountancy Act of 2004. It is a single-best-answer multiple-choice examination covering six subjects taken over three consecutive days: Financial Accounting and Reporting (FAR), Advanced Financial Accounting and Reporting (AFAR), Management Advisory Services (MAS), Auditing, Taxation, and the Regulatory Framework for Business Transactions (RFBT). The examination applies Philippine Financial Reporting Standards (PFRS and PAS, which are aligned with IFRS), Philippine Standards on Auditing, the National Internal Revenue Code as amended by the TRAIN law, and Philippine commercial law. To be licensed as a Certified Public Accountant, a candidate must obtain a general weighted average of at least 75% with no individual subject below 65%.

Assessment

Six subjects of single-best-answer multiple-choice questions: FAR, AFAR, MAS, Auditing and Taxation have 70 items each, and RFBT has 100 items, for about 450 items total.

Time Limit

Conducted over three consecutive days with two subjects per day (one morning session and one afternoon session); each subject is a separately timed examination.

Passing Score

General weighted average of at least 75% with no subject grade below 65%. A candidate rating 75% or higher in at least four of the six subjects is conditioned and may sit a removal examination on the remaining subjects within two years.

Exam Fee

The PRC examination fee is approximately PHP 900, paid via the PRC LERIS online portal during application; review-school and incidental costs are separate. (Professional Regulation Commission (PRC) - Board of Accountancy)

CPALE Exam Content Outline

18%

Financial Accounting and Reporting (FAR)

Recognition, measurement, presentation and disclosure under PFRS and PAS. Practice covers the conceptual framework, financial statements, cash and receivables, inventories, property and equipment, intangibles, leases (PFRS 16), provisions, financial instruments, equity, and earnings per share.

15%

Advanced Financial Accounting and Reporting (AFAR)

Complex reporting topics. Practice covers business combinations and consolidation (PFRS 3 and PFRS 10), partnership formation, operations, dissolution and liquidation, home office and branch accounting, foreign currency transactions, long-term construction contracts and revenue recognition (PFRS 15).

16%

Management Advisory Services (MAS)

Decision support and financial management. Practice covers cost behavior and estimation, cost-volume-profit analysis, budgeting, standard costing and variance analysis, relevant costing, capital budgeting (NPV, IRR, payback), responsibility accounting and financial statement analysis.

17%

Auditing

Audit theory and practice under the Philippine Standards on Auditing. Practice covers the audit process, risk assessment and materiality, internal control, audit evidence and procedures, sampling, completion and review, the auditor's report and modified opinions, and the Code of Ethics for Professional Accountants.

17%

Taxation

Philippine taxation under the NIRC as amended by the TRAIN law. Practice covers individual and corporate income tax, the graduated and 8% optional rates, final and capital gains taxes, value-added tax, percentage tax, transfer (estate and donor's) taxes, and tax administration.

17%

Regulatory Framework for Business Transactions (RFBT)

Philippine commercial and business law. Practice covers the law on obligations and contracts under the Civil Code, sales, partnerships, the Revised Corporation Code (RA 11232), negotiable instruments, credit transactions, and selected special commercial laws.

How to Pass the CPALE Exam

What You Need to Know

Passing score: General weighted average of at least 75% with no subject grade below 65%. A candidate rating 75% or higher in at least four of the six subjects is conditioned and may sit a removal examination on the remaining subjects within two years.
Assessment: Six subjects of single-best-answer multiple-choice questions: FAR, AFAR, MAS, Auditing and Taxation have 70 items each, and RFBT has 100 items, for about 450 items total.
Time limit: Conducted over three consecutive days with two subjects per day (one morning session and one afternoon session); each subject is a separately timed examination.
Exam fee: The PRC examination fee is approximately PHP 900, paid via the PRC LERIS online portal during application; review-school and incidental costs are separate.

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

CPALE Study Tips from Top Performers

1Build a master schedule that gives each of the six subjects dedicated weekly time; FAR, AFAR and MAS are computation-heavy and need more timed practice, while Auditing and RFBT reward careful conceptual reading.

2For FAR and AFAR, drill journal entries and standards (PFRS/PAS) until the recognition and measurement rules are automatic, then practice full consolidation, lease and EPS computations under time pressure.

3For MAS, learn the core formulas (contribution margin, CVP, variances, NPV and IRR) and always identify which costs are relevant before computing; many items hinge on ignoring sunk or unavoidable costs.

4For Taxation, memorize the current TRAIN-law brackets, the 8% optional rate threshold, VAT rules and the deadlines; tax items are highly rule-specific and reward precise recall.

5For RFBT, focus on the elements and exceptions of obligations and contracts, the Revised Corporation Code (RA 11232) and negotiable instruments; questions often turn on a single defining element.

6Take full timed multiple-choice sets per subject to build pacing, and review every wrong answer to convert it into a rule you can state in one sentence.

Frequently Asked Questions

How many subjects are in the CPA Licensure Examination?

There are six subjects: Financial Accounting and Reporting (FAR), Advanced Financial Accounting and Reporting (AFAR), Management Advisory Services (MAS), Auditing, Taxation, and the Regulatory Framework for Business Transactions (RFBT).

How many questions are on the CPALE?

The CPALE is multiple choice with about 450 items in total. Five subjects (FAR, AFAR, MAS, Auditing and Taxation) have 70 items each and RFBT has 100 items. The exam is taken over three consecutive days.

What is the passing score for the CPA board exam?

A candidate must obtain a general weighted average of at least 75% with no individual subject grade below 65%. Rating 75% or higher in at least four of the six subjects gives a conditional status.

What is a conditional pass in the CPALE?

If a candidate rates 75% or higher in at least four of the six subjects but does not pass all six, the candidate is conditioned and may take a removal examination covering only the failed subjects within two years from the original examination.

Who administers the CPA Licensure Examination?

The Professional Regulation Commission (PRC) administers the CPALE through the Board of Accountancy under Republic Act No. 9298, the Philippine Accountancy Act of 2004.

Are these official PRC practice questions?

No. These are original OpenExamPrep practice questions modelled on the six CPALE subjects and Philippine standards and law. They are for review only and are not actual past PRC board examination questions.