CHAPTER 1
Overview of Corporate Financial Reporting
LEARNING OBJECTIVES
True False Questions
Item LO Item LO
1. 4 9. 9
2. 4 10. 9
3. 9 11. 8
4. 7 12. 2
5. 6 13. 6
6. 8 14. 6
7. 6 15. 5
8. 2 16. 8
Multiple Choice Questions
Item LO Item LO Item LO Item LO Item LO
1. 4 12. 6 23. 7 34. 8 45. 2
2. 3 13. 6 24. 7 35. 8 46. 8
, 3. 3 14. 6 25. 2 36. 8 47. 8
4. 3 15. 6 26. 7 37. 8 48. 8
5. 4 16. 6 27. 8 38. 8 49. 9
6. 1 17. 6 28. 8 39. 8 50. 2
7. 5 18. 7 29. 8 40. 8 51. 9
8. 6 19. 7 30. 8 41. 8 52. 9
9. 5 20. 7 31. 8 42. 8 53. 9
10. 6 21. 7 32. 8 43. 8 54. 5
11. 6 22. 7 33. 8 44. 8
Matching
1. LO 8
2. LO 7
Exercises
1. LO 8
2. LO 8
3. LO 8
4. LO 8
Short Answer
,1. LO 2, 4
2. LO 3
3. LO 5, 6
4. LO 2, 4, 8
5. LO 8
6. LO 9
7. LO 7
8. LO 9
Essay
1. LO 8
2. LO 6
3. LO 8
TRUE-FALSE
T F 1. The shareholders are an example of an internal user of annual report
information.
T F 2. Information contained in the financial statements of a company is of use
to both internal and external users.
T F 3. The financial statements of a company are prepared by the auditors.
T F 4. A firm's activities can be divided into borrowing, investing, and operating.
, T F 5. Accountants are concerned that the information they provide is both
relevant and reliable.
T F 6. Assets and liabilities are listed in the order of their liquidity on both
classified and unclassified balance sheets.
T F 7. Verifiability is one of the fundamental characteristics that make
accounting information relevant.
T F 8. The section of an annual report that contains management’s discussion of
the company’s operating results is referred to as the Statement of
Management’s Responsibility.
T F 9. A qualified or adverse audit opinion rarely occurs in practice because
problems are often resolved prior to the financial statements being
issued.
T F 10. Chartered accountants are the only recognized professional accounting
body in Canada.
T F 11. Prepaid expenses can be found on the income statement.
T F 12. The annual report is used to communicate the results of company activity
during the year end and replaces the need for financial statements.
T F 13. The four main characteristics of accounting information includes:
understandability, relevance, reliability, and conservatism.
T F 14. Timeliness is a crucial component for accounting information relevance.
Overview of Corporate Financial Reporting
LEARNING OBJECTIVES
True False Questions
Item LO Item LO
1. 4 9. 9
2. 4 10. 9
3. 9 11. 8
4. 7 12. 2
5. 6 13. 6
6. 8 14. 6
7. 6 15. 5
8. 2 16. 8
Multiple Choice Questions
Item LO Item LO Item LO Item LO Item LO
1. 4 12. 6 23. 7 34. 8 45. 2
2. 3 13. 6 24. 7 35. 8 46. 8
, 3. 3 14. 6 25. 2 36. 8 47. 8
4. 3 15. 6 26. 7 37. 8 48. 8
5. 4 16. 6 27. 8 38. 8 49. 9
6. 1 17. 6 28. 8 39. 8 50. 2
7. 5 18. 7 29. 8 40. 8 51. 9
8. 6 19. 7 30. 8 41. 8 52. 9
9. 5 20. 7 31. 8 42. 8 53. 9
10. 6 21. 7 32. 8 43. 8 54. 5
11. 6 22. 7 33. 8 44. 8
Matching
1. LO 8
2. LO 7
Exercises
1. LO 8
2. LO 8
3. LO 8
4. LO 8
Short Answer
,1. LO 2, 4
2. LO 3
3. LO 5, 6
4. LO 2, 4, 8
5. LO 8
6. LO 9
7. LO 7
8. LO 9
Essay
1. LO 8
2. LO 6
3. LO 8
TRUE-FALSE
T F 1. The shareholders are an example of an internal user of annual report
information.
T F 2. Information contained in the financial statements of a company is of use
to both internal and external users.
T F 3. The financial statements of a company are prepared by the auditors.
T F 4. A firm's activities can be divided into borrowing, investing, and operating.
, T F 5. Accountants are concerned that the information they provide is both
relevant and reliable.
T F 6. Assets and liabilities are listed in the order of their liquidity on both
classified and unclassified balance sheets.
T F 7. Verifiability is one of the fundamental characteristics that make
accounting information relevant.
T F 8. The section of an annual report that contains management’s discussion of
the company’s operating results is referred to as the Statement of
Management’s Responsibility.
T F 9. A qualified or adverse audit opinion rarely occurs in practice because
problems are often resolved prior to the financial statements being
issued.
T F 10. Chartered accountants are the only recognized professional accounting
body in Canada.
T F 11. Prepaid expenses can be found on the income statement.
T F 12. The annual report is used to communicate the results of company activity
during the year end and replaces the need for financial statements.
T F 13. The four main characteristics of accounting information includes:
understandability, relevance, reliability, and conservatism.
T F 14. Timeliness is a crucial component for accounting information relevance.
