INTERMEDIATE ACCOUNTING VOLUME 1
8TH CANADIAN EDITION BEECHY
DAVIDSON-CONROD FARRELL MCLEOD-
DICK TOMULKA SEVEL SOLUTION
MANUAL ACTUAL EXAMINATION 2026
QUESTIONS WITH SOLUTIONS GRADED A+
⫸ Objective of Financial Reporting Answer: Provide information about
the reporting entity that is useful to present and potential to equity
investors, lenders, and others.
⫸ Securities and Exchange Commission (SEC) Answer: -Federal
agency developed to help develop and standardize financial information
presented to stockholders
-Companies that issue securities to public are required to file with SEC
-Have powers to prescribe auditing practices and standards to be
employed by companies that fall within its jurisdiction
-Requires registrants to adhere to GAAP
-Relies on FASB to develop accounting standards
-Mission to protect investors, maintain fair, orderly, and efficient
markets, and facilitate capital formation
-Regulations require filing of annual (10-K) & quarterly (10-Q) reports
and others
,-Enforcement authority
⫸ American Institute of CPAs (AICPA) Answer: -National professional
org of CPAs
-Important to development of GAAP
-Established the Committee on Accounting Procedure (CAP) →
Accounting Principles Board (APB) → FASB
⫸ Financial Accounting Standards Board (FASB) Answer: -Major
organization of the standard-setting structure for financial accounting
-Wants to establish and improve standards of financial accounting and
reporting for the guidance and education of the public
-Accounting guidance issued by FASB is considered GAAP
-Issues: Accounting standards updates & financial accounting concepts
⫸ Generally Accepted Accounting Principles (GAAP) Answer:
common set of accounting standards and procedures for which either an
authoritative accounting rule making body has established a principle of
reporting in a given area, or over time, a given practice has been
accepted as appropriate because of its universal application
⫸ FASB Codification Answer: -Provides all the authoritative literature
related to a particular topic in one place
-Topic → subtopics → sections → paragraphs
, ⫸ Major Challenges in Financial Reporting Answer: GAAP is as much
a product of political action as it is of careful logic or empirical findings
⫸ Measurement Principle Answer: Historical cost and fair value
⫸ Revenue Recognition Principle Answer: Requires companies
recognize revenue in the period performance obligation is satisfied.
⫸ Expense Recognition Principle Answer: Expenses follows the
revenues.
⫸ Full Disclosure Principle Answer: Providing information that is of
sufficient importance to influence the judgement and decisions of an
informed user (financial statements, notes to the statements,
supplementary information).
⫸ Two Perspectives of Time Answer: 1. Date (point in time): "as of";
balance sheet
2. Time between two dates (period): "for the year ended"; income
statement, cash flow
⫸ DEAD CRLS Answer: Debits
Expenses
Assets
Dividends declared
8TH CANADIAN EDITION BEECHY
DAVIDSON-CONROD FARRELL MCLEOD-
DICK TOMULKA SEVEL SOLUTION
MANUAL ACTUAL EXAMINATION 2026
QUESTIONS WITH SOLUTIONS GRADED A+
⫸ Objective of Financial Reporting Answer: Provide information about
the reporting entity that is useful to present and potential to equity
investors, lenders, and others.
⫸ Securities and Exchange Commission (SEC) Answer: -Federal
agency developed to help develop and standardize financial information
presented to stockholders
-Companies that issue securities to public are required to file with SEC
-Have powers to prescribe auditing practices and standards to be
employed by companies that fall within its jurisdiction
-Requires registrants to adhere to GAAP
-Relies on FASB to develop accounting standards
-Mission to protect investors, maintain fair, orderly, and efficient
markets, and facilitate capital formation
-Regulations require filing of annual (10-K) & quarterly (10-Q) reports
and others
,-Enforcement authority
⫸ American Institute of CPAs (AICPA) Answer: -National professional
org of CPAs
-Important to development of GAAP
-Established the Committee on Accounting Procedure (CAP) →
Accounting Principles Board (APB) → FASB
⫸ Financial Accounting Standards Board (FASB) Answer: -Major
organization of the standard-setting structure for financial accounting
-Wants to establish and improve standards of financial accounting and
reporting for the guidance and education of the public
-Accounting guidance issued by FASB is considered GAAP
-Issues: Accounting standards updates & financial accounting concepts
⫸ Generally Accepted Accounting Principles (GAAP) Answer:
common set of accounting standards and procedures for which either an
authoritative accounting rule making body has established a principle of
reporting in a given area, or over time, a given practice has been
accepted as appropriate because of its universal application
⫸ FASB Codification Answer: -Provides all the authoritative literature
related to a particular topic in one place
-Topic → subtopics → sections → paragraphs
, ⫸ Major Challenges in Financial Reporting Answer: GAAP is as much
a product of political action as it is of careful logic or empirical findings
⫸ Measurement Principle Answer: Historical cost and fair value
⫸ Revenue Recognition Principle Answer: Requires companies
recognize revenue in the period performance obligation is satisfied.
⫸ Expense Recognition Principle Answer: Expenses follows the
revenues.
⫸ Full Disclosure Principle Answer: Providing information that is of
sufficient importance to influence the judgement and decisions of an
informed user (financial statements, notes to the statements,
supplementary information).
⫸ Two Perspectives of Time Answer: 1. Date (point in time): "as of";
balance sheet
2. Time between two dates (period): "for the year ended"; income
statement, cash flow
⫸ DEAD CRLS Answer: Debits
Expenses
Assets
Dividends declared
