FULL TEST BANK FOR
l# l# l#
MODERN ADVANCED ACCOUNTING IN CANADA 9TH
l# l# l# l# l#
EDITION HILTON MURRAY, HERAUF DARRELL
l# l# l# l# l#
CHAPTE
R 01 CONCEPTUAL AND CASE ANALYSIS
l# l# l# l# l#
FRAMEWORKS FOR FINANCIAL REPORTING
l# l# l# l#
Multiple l#Choice l#Questions
1. Which l#of l#the l#following l#would l#NOT l#be l#a l#reason l#to l#obtain l#a l#greater
l#understanding l#of l#accounting l#practices l#in l#other l#nations?
A. Financial l#results l#are l#disclosed l#in l#different l#currencies.
B. One l#needs l#to l#be l#aware l#of l#differing l#disclosure l#requirements l#from l#nation
l#to l#nation, l#as l#this l#impacts l#the l#preparation l#of l#financial l#statements.
C. Income-smoothing l#may l#have l#affected l#a l#foreign l#subsidiary's l#results;
l#such l#smoothing l#practices l#are l#not l#permitted l#in l#North l#America.
D. Departures l#from l#the l#historical l#cost l#principle l#may l#be l#possible l#in l#other l#nations.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-01 l#Describe l#and l#apply l#the l#conceptual l#framework l#for l#financial
l#reporting. l # Topic: l#01-01 l#The l#Conceptual l#Framework l#for l#Financial l#Reporting
2. Which l#of l#the l#following l#would l#be l#most l#affected l#by l#financial l#statements
l#being l#prepared l#under l#different l#accounting l#principles?
A. Reduced l#comparability.
B. Reduced l#reliability.
C. Increased l#complexity.
D. Inaccurate l#asset l#valuations.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-01 l#Describe l#and l#apply l#the l#conceptual l#framework l#for l#financial
l#reporting. l # Topic: l#01-01 l#The l#Conceptual l#Framework l#for l#Financial l#Reporting
1-1
,3. The l#CPA l#Canada l#Handbook l#- l#Accounting l#is l#the l#handbook l#of l#Canadian
l#accounting l#standards. l#Why l#do l#companies l#in l#Canada l#ensure l#that l#their
l#financial l#reporting l#is l#consistent l#with l#Canadian l#GAAP?
A. Their l#bank l#requires l#them l#to l#do l#so.
B. Their l#auditors l#require l#them l#to l#do l#so.
C. Reporting l#under l#the l#CPA l#Canada l#Handbook l#- l#Accounting l#is l#required l#by
l#public l#companies' l#boards l#of l#directors.
D. Compliance l#with l#the l#CPA l#Canada l#Handbook l#- l#Accounting l#pronouncements
l#is l#usually l#required l#by l#many l#legal l#statutes.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-01 l#Describe l#and l#apply l#the l#conceptual l#framework l#for l#financial
l#reporting. l # Topic: l#01-01 l#The l#Conceptual l#Framework l#for l#Financial l#Reporting
4. Which l#decision l#has l#Canada l#made l#with l#respect l#to l#financial
l#reporting l#for l#private l#enterprises?
A. To l#adopt l#the l#IFRS l#standards l#for l#small l#and l#medium-siẓed l#enterprises.
B. To l#retain l#the l#current l#standards.
C. To l#look l#to l#US l#GAAP l#for l#standards.
D. To l#develop l#and l#maintain l#its l#own l#standards l#for l#private l#enterprises.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-05 l#GAAP l#for l#Private l#Enterprises
5. Starting l#in l#2011, l#what l#is l#the l#definition l#of l#a l#private l#enterprise l#(PE) l#under l#Canadian
l#GAAP?
A. A l#corporation l#that l#has l#no l#public l#shareholders.
B. A l#corporation l#that l#has l#less l#than l#500 l#shareholders l#and l#is l#not l#listed l#on l#a l#stock
l#exchange.
C. A l#corporation l#which l#is l#not l#profit l#oriented.
D. A l#profit l#oriented l#enterprise l#that l#has l#none l#of l#its l#issued l#and
l#outstanding l#financial l#instruments l#traded l#in l#a l#public l#market l#and l#does l#not
l#hold l#assets l#in l#a l#fiduciary l#capacity l#for l#a l#broad l#group l#of l#outsiders l#as l#one
l#of l#its l#primary l#businesses.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
1-2
,l#of l#organiẓations. l# Topic: l#01-05 l#GAAP l#for l#Private l#Enterprises
1-3
, 6. Which l#enterprises l#must l#report l#under l#IFRS l#in l#Canada?
A. All l#corporations, l#government l#agencies l#and l#private l#companies.
B. Public l#companies l#and l#private l#companies l#whose l#shareholders' l#equity l#is l#in l#excess l#of
$500,000,000 l#at l#any l#particular l#year l#end.
C. Public l#companies, l#private l#companies l#and l#not-for-profit l#organiẓations.
D. Publicly l#accountable l#enterprises.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-04 l#GAAP l#for l#Publicly l#Accountable l#Enterprises
7. What l#approach l#did l#Canada l#first l#decide l#to l#take l#with l#respect l#to l#convergence l#with l#IFRS
A. Harmoniẓation l#of l#CPA l#Canada l#Handbook l#with l#IFRS.
B. Substituting l#IFRS l#for l#Canadian l#GAAP l#when l#approved l#by l#the l#IASB.
C. Adopting l#some l#but l#not l#necessarily l#all l#IFRSs l#by l#reviewing l#them l#on l#a l#case l#by l#case
l#basis.
D. Reviewing l#them l#with l#all l#publically l#accountable l#entities l#to l#see l#which
l#ones l#would l#be l#acceptable.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-04 l#GAAP l#for l#Publicly l#Accountable l#Enterprises
8. What l#choice(s) l#do l#private l#enterprises l#have l#in l#their l#financial l#reporting l#in l#Canada?
A. They l#have l#no l#choice l#at l#all; l#they l#will l#need l#to l#report l#under l#IFRS.
B. They l#may l#elect l#to l#continue l#with l#differential l#reporting.
C. They l#may l#adopt l#accounting l#principles l#that l#are l#appropriate l#to l#the l#circumstances.
D. They l#may l#elect l#to l#report l#under l#either l#IFRS l#or l#ASPE l#but l#once l#adopted,
l#must l#use l#all l#the l#standards.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-05 l#GAAP l#for l#Private l#Enterprises
1-4
l# l# l#
MODERN ADVANCED ACCOUNTING IN CANADA 9TH
l# l# l# l# l#
EDITION HILTON MURRAY, HERAUF DARRELL
l# l# l# l# l#
CHAPTE
R 01 CONCEPTUAL AND CASE ANALYSIS
l# l# l# l# l#
FRAMEWORKS FOR FINANCIAL REPORTING
l# l# l# l#
Multiple l#Choice l#Questions
1. Which l#of l#the l#following l#would l#NOT l#be l#a l#reason l#to l#obtain l#a l#greater
l#understanding l#of l#accounting l#practices l#in l#other l#nations?
A. Financial l#results l#are l#disclosed l#in l#different l#currencies.
B. One l#needs l#to l#be l#aware l#of l#differing l#disclosure l#requirements l#from l#nation
l#to l#nation, l#as l#this l#impacts l#the l#preparation l#of l#financial l#statements.
C. Income-smoothing l#may l#have l#affected l#a l#foreign l#subsidiary's l#results;
l#such l#smoothing l#practices l#are l#not l#permitted l#in l#North l#America.
D. Departures l#from l#the l#historical l#cost l#principle l#may l#be l#possible l#in l#other l#nations.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-01 l#Describe l#and l#apply l#the l#conceptual l#framework l#for l#financial
l#reporting. l # Topic: l#01-01 l#The l#Conceptual l#Framework l#for l#Financial l#Reporting
2. Which l#of l#the l#following l#would l#be l#most l#affected l#by l#financial l#statements
l#being l#prepared l#under l#different l#accounting l#principles?
A. Reduced l#comparability.
B. Reduced l#reliability.
C. Increased l#complexity.
D. Inaccurate l#asset l#valuations.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-01 l#Describe l#and l#apply l#the l#conceptual l#framework l#for l#financial
l#reporting. l # Topic: l#01-01 l#The l#Conceptual l#Framework l#for l#Financial l#Reporting
1-1
,3. The l#CPA l#Canada l#Handbook l#- l#Accounting l#is l#the l#handbook l#of l#Canadian
l#accounting l#standards. l#Why l#do l#companies l#in l#Canada l#ensure l#that l#their
l#financial l#reporting l#is l#consistent l#with l#Canadian l#GAAP?
A. Their l#bank l#requires l#them l#to l#do l#so.
B. Their l#auditors l#require l#them l#to l#do l#so.
C. Reporting l#under l#the l#CPA l#Canada l#Handbook l#- l#Accounting l#is l#required l#by
l#public l#companies' l#boards l#of l#directors.
D. Compliance l#with l#the l#CPA l#Canada l#Handbook l#- l#Accounting l#pronouncements
l#is l#usually l#required l#by l#many l#legal l#statutes.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-01 l#Describe l#and l#apply l#the l#conceptual l#framework l#for l#financial
l#reporting. l # Topic: l#01-01 l#The l#Conceptual l#Framework l#for l#Financial l#Reporting
4. Which l#decision l#has l#Canada l#made l#with l#respect l#to l#financial
l#reporting l#for l#private l#enterprises?
A. To l#adopt l#the l#IFRS l#standards l#for l#small l#and l#medium-siẓed l#enterprises.
B. To l#retain l#the l#current l#standards.
C. To l#look l#to l#US l#GAAP l#for l#standards.
D. To l#develop l#and l#maintain l#its l#own l#standards l#for l#private l#enterprises.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-05 l#GAAP l#for l#Private l#Enterprises
5. Starting l#in l#2011, l#what l#is l#the l#definition l#of l#a l#private l#enterprise l#(PE) l#under l#Canadian
l#GAAP?
A. A l#corporation l#that l#has l#no l#public l#shareholders.
B. A l#corporation l#that l#has l#less l#than l#500 l#shareholders l#and l#is l#not l#listed l#on l#a l#stock
l#exchange.
C. A l#corporation l#which l#is l#not l#profit l#oriented.
D. A l#profit l#oriented l#enterprise l#that l#has l#none l#of l#its l#issued l#and
l#outstanding l#financial l#instruments l#traded l#in l#a l#public l#market l#and l#does l#not
l#hold l#assets l#in l#a l#fiduciary l#capacity l#for l#a l#broad l#group l#of l#outsiders l#as l#one
l#of l#its l#primary l#businesses.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
1-2
,l#of l#organiẓations. l# Topic: l#01-05 l#GAAP l#for l#Private l#Enterprises
1-3
, 6. Which l#enterprises l#must l#report l#under l#IFRS l#in l#Canada?
A. All l#corporations, l#government l#agencies l#and l#private l#companies.
B. Public l#companies l#and l#private l#companies l#whose l#shareholders' l#equity l#is l#in l#excess l#of
$500,000,000 l#at l#any l#particular l#year l#end.
C. Public l#companies, l#private l#companies l#and l#not-for-profit l#organiẓations.
D. Publicly l#accountable l#enterprises.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-04 l#GAAP l#for l#Publicly l#Accountable l#Enterprises
7. What l#approach l#did l#Canada l#first l#decide l#to l#take l#with l#respect l#to l#convergence l#with l#IFRS
A. Harmoniẓation l#of l#CPA l#Canada l#Handbook l#with l#IFRS.
B. Substituting l#IFRS l#for l#Canadian l#GAAP l#when l#approved l#by l#the l#IASB.
C. Adopting l#some l#but l#not l#necessarily l#all l#IFRSs l#by l#reviewing l#them l#on l#a l#case l#by l#case
l#basis.
D. Reviewing l#them l#with l#all l#publically l#accountable l#entities l#to l#see l#which
l#ones l#would l#be l#acceptable.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-04 l#GAAP l#for l#Publicly l#Accountable l#Enterprises
8. What l#choice(s) l#do l#private l#enterprises l#have l#in l#their l#financial l#reporting l#in l#Canada?
A. They l#have l#no l#choice l#at l#all; l#they l#will l#need l#to l#report l#under l#IFRS.
B. They l#may l#elect l#to l#continue l#with l#differential l#reporting.
C. They l#may l#adopt l#accounting l#principles l#that l#are l#appropriate l#to l#the l#circumstances.
D. They l#may l#elect l#to l#report l#under l#either l#IFRS l#or l#ASPE l#but l#once l#adopted,
l#must l#use l#all l#the l#standards.
Accessibility: l#Keyboard l#Navigation
l # Blooms: l#Remember
Difficulty: l#Easy
Learning l#Objective: l#01-02 l#Describe l#how l#accounting l#standards l#in l#Canada l#are l#tailored l#to l#different l#types
l#of l#organiẓations. l # Topic: l#01-05 l#GAAP l#for l#Private l#Enterprises
1-4
