, CHAPTER 1
THE CANADIAN
FINANCIAL REPORTING ENVIRONMENT
MULTIPLE CHOICE—Conceptual
Answer No. Description
d 1. Accounting characteristics.
a 2. Nature of financial accounting.
c 3. Definition of financial accounting.
a 4. Financial reporting entity.
d 5. Efficient use of resources.
d 6. Capital allocation process.
c 7. Assessing management stewardship.
c 8. Objectives of financial reporting.
a 9. Role of AcSB.
c 10. Body responsible for setting GAAP.
b 11. Preparation of biased information.
d 12. Parties instrumental in development of reporting standards.
d 13. Stakeholders in the financial reporting environment..
a 14. “Due process”.
d 15. Causes of subprime lending crisis.
d 16. Management bias.
b 17. Adoption of IFRS.
c 18. Role of OSC.
d 19. Definition of GAAP.
b 20. Changing nature of the economy.
d 21. Exercise of professional judgement.
c 22. Major factors in the reporting environment.
a 23. Impact of technology on financial reporting.
b 24. Nature of the “Balanced Scorecard”.
a 25. Responsibility for financial statements.
d 26. GAAP for private enterprises.
d 27. Reporting principles
b 28. SOX.
a 29 AcSB’s standard setting process
Test Bank Chapter 1
Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited
,1-2 Test Bank for Intermediate Accounting, Ninth Canadian Edition
EXERCISES
Item Description
E1-30 Objectives of financial reporting.
E1-31 Role of securities commissions and stock exchanges.
E1-32 User needs.
E1-33 Sources of GAAP.
E1-34 Standard Setting.
E1-35 Challenges facing financial reporting.
E1-36 Stakeholders in the financial reporting environment.
Test Bank Chapter 1
Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited
, The Canadian Financial Reporting Environment 1-3
MULTIPLE CHOICE—Conceptual
1. The essential characteristic(s) of accounting is (are)
a. communication of financial information to interested persons.
b. communication of financial information about economic entities.
c. identification, measurement, and communication of financial information.
d. all of these.
2. Financial accounting is concerned with the process that culminates in
a. the preparation of financial reports.
b. specialized reports for inventory management and control.
c. specialized reports for income tax calculation and recognition.
d. reports on changes in stock prices and future estimates of market position.
3. Financial accounting can be broadly defined as the area of accounting that prepares
financial statements to be used
a by parties internal to the business enterprise only.
b. by investors only.
c. by parties both internal and external to the business enterprise.
d. primarily by management.
4. The information provided by financial reporting pertains to
a. individual business enterprises, rather than to industries or an economy as a whole or
to members of society as consumers.
b. business industries, rather than to individual enterprises or an economy as a whole or
to members of society as consumers.
c. individual business enterprises, industries, and an economy as a whole, rather than to
members of society as consumers.
d. an economy as a whole and to members of society as consumers, rather than to
individual enterprises or industries.
5. Whether a business is successful and thrives is determined by
a. free enterprise.
b. competition.
c. markets.
d. all of these.
6. An effective capital allocation process
a. encourages innovation.
b. promotes productivity.
c. provides an efficient and liquid market for buying and selling securities.
d. all of these.
Test Bank Chapter 1
Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited
THE CANADIAN
FINANCIAL REPORTING ENVIRONMENT
MULTIPLE CHOICE—Conceptual
Answer No. Description
d 1. Accounting characteristics.
a 2. Nature of financial accounting.
c 3. Definition of financial accounting.
a 4. Financial reporting entity.
d 5. Efficient use of resources.
d 6. Capital allocation process.
c 7. Assessing management stewardship.
c 8. Objectives of financial reporting.
a 9. Role of AcSB.
c 10. Body responsible for setting GAAP.
b 11. Preparation of biased information.
d 12. Parties instrumental in development of reporting standards.
d 13. Stakeholders in the financial reporting environment..
a 14. “Due process”.
d 15. Causes of subprime lending crisis.
d 16. Management bias.
b 17. Adoption of IFRS.
c 18. Role of OSC.
d 19. Definition of GAAP.
b 20. Changing nature of the economy.
d 21. Exercise of professional judgement.
c 22. Major factors in the reporting environment.
a 23. Impact of technology on financial reporting.
b 24. Nature of the “Balanced Scorecard”.
a 25. Responsibility for financial statements.
d 26. GAAP for private enterprises.
d 27. Reporting principles
b 28. SOX.
a 29 AcSB’s standard setting process
Test Bank Chapter 1
Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited
,1-2 Test Bank for Intermediate Accounting, Ninth Canadian Edition
EXERCISES
Item Description
E1-30 Objectives of financial reporting.
E1-31 Role of securities commissions and stock exchanges.
E1-32 User needs.
E1-33 Sources of GAAP.
E1-34 Standard Setting.
E1-35 Challenges facing financial reporting.
E1-36 Stakeholders in the financial reporting environment.
Test Bank Chapter 1
Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited
, The Canadian Financial Reporting Environment 1-3
MULTIPLE CHOICE—Conceptual
1. The essential characteristic(s) of accounting is (are)
a. communication of financial information to interested persons.
b. communication of financial information about economic entities.
c. identification, measurement, and communication of financial information.
d. all of these.
2. Financial accounting is concerned with the process that culminates in
a. the preparation of financial reports.
b. specialized reports for inventory management and control.
c. specialized reports for income tax calculation and recognition.
d. reports on changes in stock prices and future estimates of market position.
3. Financial accounting can be broadly defined as the area of accounting that prepares
financial statements to be used
a by parties internal to the business enterprise only.
b. by investors only.
c. by parties both internal and external to the business enterprise.
d. primarily by management.
4. The information provided by financial reporting pertains to
a. individual business enterprises, rather than to industries or an economy as a whole or
to members of society as consumers.
b. business industries, rather than to individual enterprises or an economy as a whole or
to members of society as consumers.
c. individual business enterprises, industries, and an economy as a whole, rather than to
members of society as consumers.
d. an economy as a whole and to members of society as consumers, rather than to
individual enterprises or industries.
5. Whether a business is successful and thrives is determined by
a. free enterprise.
b. competition.
c. markets.
d. all of these.
6. An effective capital allocation process
a. encourages innovation.
b. promotes productivity.
c. provides an efficient and liquid market for buying and selling securities.
d. all of these.
Test Bank Chapter 1
Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited
