Test Bank For Advanced Accounting, 1st Canadian Edition (Updated
Version) Gail Fayerman (All Chapters 1-10, 100% Original Verified,
A+ Grade)
This is The Only Test Bank For Advanced Accounting, 1st Canadian
Edition (Updated Version) Gail Fayerman All Other Files in The
Market are Fake/Old/Wrong Edition.
The Textbook This Document Fully Covers
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail
Fayerman
• Publisher : Wiley
• Publication date : October 30, 2012
• Language : English
• Print length : 592 pages
• ISBN-10 : 111803791X
• ISBN-13 : 978-1118037911
,Fayerman: Advanced Accounting, Ce Chapter 1: Accounting for Investments Testbank
Test Bank for Advanced Accounting, Canadian
Edition (Updated Version) 1e Gail Fayerman
Chapter 1 – Accounting for Investments
True or False
1) If a company makes a non-strategic investment it is considered a financial asset.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for non-strategic investments in equity.
Section Reference: Non-Strategic Investments in Equity
Feedback: Review section “Criteria”
2) When a company has control over another company, a parent-subsidiary relationship is
said to exist.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for parent-subsidiary relationships.
Section Reference: Strategic Investments - Parent-Subsidiary Relationships
Feedback: Review section “Identifying Parent-Subsidiary Relationships”
3) An associate is an entity, including an unincorporated company such as a partnership,
over which the investor has significant influence and that is also a subsidiary or a joint
venture.
Answer: False
Difficulty: Medium
Learning Objective: Identify and account for associates.
Section Reference: Strategic Investments - Associates
Feedback: Review section “Identifying Associates”
4) Under the equity method, the investment account is updated for the investor’s share of
1
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail Fayerman
,Fayerman: Advanced Accounting, Ce Chapter 1: Accounting for Investments Testbank
profit and distributions.
Answer: True
Difficulty: Medium
Learning Objective: Identify and account for associates.
Section Reference: Strategic Investments - Associates
Feedback: Review section “Equity Method of Accounting”
5) A company is a party to a joint venture when it does not have the rights to the assets or
the obligations for the liabilities.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for joint arrangements.
Section Reference: Strategic Investments – Joint Arrangements
Feedback: Review section “Identifying Joint Arrangements”
6) If Darlington Inc. owns 30% of a jointly controlled operation, it would reflect 100% of
each asset, liability, income or expense that is part of the joint operation on its own
financial statements.
Answer: False
Difficulty: Moderate
Learning Objective: Identify and account for joint arrangements.
Section Reference: Strategic Investments – Joint Arrangements
Feedback: Review section “Accounting and Reporting for Joint Arrangements”
7) When the non-strategic equity investment is initially recorded, it must be measured at
its fair value.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for non-strategic investments in equity.
Section Reference: Non-Strategic Investments in Equity
Feedback: Review section “Recording Non-Strategic Investments in Equity”
8) Companies invest in non-strategic investments to obtain a higher return than holding
cash in a bank account.
2
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail Fayerman
, Fayerman: Advanced Accounting, Ce Chapter 1: Accounting for Investments Testbank
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for non-strategic investments in equity.
Section Reference: Non-Strategic Investments in Equity
Feedback: Review section “Identifying Non-Strategic Investments in Equity”
9) The ability of a company to control another cannot be affected by relationships with
other parties.
Answer: False
Difficulty: Medium
Learning Objective: Identify and account for parent-subsidiary relationships.
Section Reference: Strategic Investments - Parent-Subsidiary Relationships
Feedback: Review section “Identifying Parent-Subsidiary Relationships”
10) When reflecting an investment using the cost method, the investment is initially
recorded at cost and the balance is not adjusted in subsequent periods unless there is an
impairment.
Answer: True
Difficulty: Medium
Learning Objective: Identify and account for associates.
Section Reference: Strategic Investments - Associates
Feedback: Review section “Equity Method of Accounting”
11) Generally speaking, all parent companies are responsible for the preparation of
consolidated financial statements.
Answer: True
Difficulty: Medium
Learning Objective: Identify and account for parent-subsidiary relationships.
Section Reference: Strategic Investments - Parent-Subsidiary Relationships
Feedback: Review section “Presentation of Consolidated Financial Statements for
Controlled Entities”
12) The investor does not need to hold shares in an associate, but where more than 20%
of the voting power is held, significant influence is presumed to exist.
3
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail Fayerman
Version) Gail Fayerman (All Chapters 1-10, 100% Original Verified,
A+ Grade)
This is The Only Test Bank For Advanced Accounting, 1st Canadian
Edition (Updated Version) Gail Fayerman All Other Files in The
Market are Fake/Old/Wrong Edition.
The Textbook This Document Fully Covers
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail
Fayerman
• Publisher : Wiley
• Publication date : October 30, 2012
• Language : English
• Print length : 592 pages
• ISBN-10 : 111803791X
• ISBN-13 : 978-1118037911
,Fayerman: Advanced Accounting, Ce Chapter 1: Accounting for Investments Testbank
Test Bank for Advanced Accounting, Canadian
Edition (Updated Version) 1e Gail Fayerman
Chapter 1 – Accounting for Investments
True or False
1) If a company makes a non-strategic investment it is considered a financial asset.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for non-strategic investments in equity.
Section Reference: Non-Strategic Investments in Equity
Feedback: Review section “Criteria”
2) When a company has control over another company, a parent-subsidiary relationship is
said to exist.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for parent-subsidiary relationships.
Section Reference: Strategic Investments - Parent-Subsidiary Relationships
Feedback: Review section “Identifying Parent-Subsidiary Relationships”
3) An associate is an entity, including an unincorporated company such as a partnership,
over which the investor has significant influence and that is also a subsidiary or a joint
venture.
Answer: False
Difficulty: Medium
Learning Objective: Identify and account for associates.
Section Reference: Strategic Investments - Associates
Feedback: Review section “Identifying Associates”
4) Under the equity method, the investment account is updated for the investor’s share of
1
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail Fayerman
,Fayerman: Advanced Accounting, Ce Chapter 1: Accounting for Investments Testbank
profit and distributions.
Answer: True
Difficulty: Medium
Learning Objective: Identify and account for associates.
Section Reference: Strategic Investments - Associates
Feedback: Review section “Equity Method of Accounting”
5) A company is a party to a joint venture when it does not have the rights to the assets or
the obligations for the liabilities.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for joint arrangements.
Section Reference: Strategic Investments – Joint Arrangements
Feedback: Review section “Identifying Joint Arrangements”
6) If Darlington Inc. owns 30% of a jointly controlled operation, it would reflect 100% of
each asset, liability, income or expense that is part of the joint operation on its own
financial statements.
Answer: False
Difficulty: Moderate
Learning Objective: Identify and account for joint arrangements.
Section Reference: Strategic Investments – Joint Arrangements
Feedback: Review section “Accounting and Reporting for Joint Arrangements”
7) When the non-strategic equity investment is initially recorded, it must be measured at
its fair value.
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for non-strategic investments in equity.
Section Reference: Non-Strategic Investments in Equity
Feedback: Review section “Recording Non-Strategic Investments in Equity”
8) Companies invest in non-strategic investments to obtain a higher return than holding
cash in a bank account.
2
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail Fayerman
, Fayerman: Advanced Accounting, Ce Chapter 1: Accounting for Investments Testbank
Answer: True
Difficulty: Easy
Learning Objective: Identify and account for non-strategic investments in equity.
Section Reference: Non-Strategic Investments in Equity
Feedback: Review section “Identifying Non-Strategic Investments in Equity”
9) The ability of a company to control another cannot be affected by relationships with
other parties.
Answer: False
Difficulty: Medium
Learning Objective: Identify and account for parent-subsidiary relationships.
Section Reference: Strategic Investments - Parent-Subsidiary Relationships
Feedback: Review section “Identifying Parent-Subsidiary Relationships”
10) When reflecting an investment using the cost method, the investment is initially
recorded at cost and the balance is not adjusted in subsequent periods unless there is an
impairment.
Answer: True
Difficulty: Medium
Learning Objective: Identify and account for associates.
Section Reference: Strategic Investments - Associates
Feedback: Review section “Equity Method of Accounting”
11) Generally speaking, all parent companies are responsible for the preparation of
consolidated financial statements.
Answer: True
Difficulty: Medium
Learning Objective: Identify and account for parent-subsidiary relationships.
Section Reference: Strategic Investments - Parent-Subsidiary Relationships
Feedback: Review section “Presentation of Consolidated Financial Statements for
Controlled Entities”
12) The investor does not need to hold shares in an associate, but where more than 20%
of the voting power is held, significant influence is presumed to exist.
3
Advanced Accounting, 1st Canadian Edition (Updated Version) Gail Fayerman
