IFIC Chapter 9 Pre Test Questions With
Solved Solutions 2026/2027.
True Value - Answer -if the "true" value differs from the current market price, this is an
indication of a buying or selling opportunity
-comes form information about earnings (or profits) of these companies
-the value of a share is primarily influenced by the company's expected future earnings
Financial Statements - Answer -Financial statements of publicly traded companies in Canada
are produced according to International Financial Reporting Standards (IFRS). IFRS requires an
extensive and detailed disclosure by the company to explain why particular accounting
treatments are utilized.
4 Essential Financial Statements - Answer -the Statement of Financial Position
-the Statement of Comprehensive Income
-the Statement of Changes in Equity
-the Statement of Cash flow
Statement of Financial Position - Answer -shows a company's financial position at a specific
date. In annual reports, that date is the last day of the company's fiscal year
-shows what the company owns and what is owing to it (assets)
-shows assets, liabilities, and shareholders equity
Assets - Answer -what the company owns and what is owing to it
-the company's total assets are equal to the sum of equity plus the company's liabilities
-assets are classified as either current or fixed, with the dividing point usually being one year
Equity - Answer -represents the shareholders' interest in the company and what the company
owes (called liabilities)
-equity represents the excess of the company's assets over its liabilities.
Liabilities - Answer -what the company owes
-classified as either current or long-term, with a one-year dividing line.
Current Assets - Answer -assets that are expected to be converted to cash within one year,
although this conversion might be indirect.
-ex: trade receivables, cash
, Fixed Assets - Answer -assets that are expected to last longer than one year. These are long-
term assets used in the day-to-day operations of a company to produce the goods or services
the company sells. They are not intended to be sold.
-ex: are automobiles, trucks, factories, computers, other office equipment, land
Depreciation/Amoritization - Answer -with the exception of land, assets wear out over time or
otherwise lose their usefulness. This used-up amount is known as depreciation or amortization.
-used for fixed assets
-the term "net" means that depreciation has been removed from the original value of the fixed
assets.
Current Liabilities - Answer -liabilities that are expected to be paid within one year
-ex: trade payable, note payable, accrued charges
Accrued Charges - Answer -wages earned by employees but not yet paid, or taxes payable to
the federal or provincial governments
Trade Payable - Answer -represent the goods the company has bought for which payment has
not yet been made
Note Payable - Answer -represent loans that must be paid off by the company within one year
Trade Receivable - Answer -represent the amounts owed to the company by clients who have
bought goods but haven't paid for them yet.
Long-Term Liabilities - Answer -liabilities not likely to be paid off within one year; such is the
case for long-term debt.
-this debt could be in the form of bonds issued by the corporation or a term loan made by a
lender
Shareholders Equity - Answer refers to the amount contributed to the financing of the
company by shareholders over time by one of two means.
-shareholders might have contributed by buying shares from the company when they were first
issued in the primary market; that is the amount indicated in the common shares account.
-all of the company's annual profits that have not been distributed to shareholders but
reinvested in the company continue to accumulate in shareholders' equity over time: these are
known as retained earnings
-common shares plus retained earnings
Solved Solutions 2026/2027.
True Value - Answer -if the "true" value differs from the current market price, this is an
indication of a buying or selling opportunity
-comes form information about earnings (or profits) of these companies
-the value of a share is primarily influenced by the company's expected future earnings
Financial Statements - Answer -Financial statements of publicly traded companies in Canada
are produced according to International Financial Reporting Standards (IFRS). IFRS requires an
extensive and detailed disclosure by the company to explain why particular accounting
treatments are utilized.
4 Essential Financial Statements - Answer -the Statement of Financial Position
-the Statement of Comprehensive Income
-the Statement of Changes in Equity
-the Statement of Cash flow
Statement of Financial Position - Answer -shows a company's financial position at a specific
date. In annual reports, that date is the last day of the company's fiscal year
-shows what the company owns and what is owing to it (assets)
-shows assets, liabilities, and shareholders equity
Assets - Answer -what the company owns and what is owing to it
-the company's total assets are equal to the sum of equity plus the company's liabilities
-assets are classified as either current or fixed, with the dividing point usually being one year
Equity - Answer -represents the shareholders' interest in the company and what the company
owes (called liabilities)
-equity represents the excess of the company's assets over its liabilities.
Liabilities - Answer -what the company owes
-classified as either current or long-term, with a one-year dividing line.
Current Assets - Answer -assets that are expected to be converted to cash within one year,
although this conversion might be indirect.
-ex: trade receivables, cash
, Fixed Assets - Answer -assets that are expected to last longer than one year. These are long-
term assets used in the day-to-day operations of a company to produce the goods or services
the company sells. They are not intended to be sold.
-ex: are automobiles, trucks, factories, computers, other office equipment, land
Depreciation/Amoritization - Answer -with the exception of land, assets wear out over time or
otherwise lose their usefulness. This used-up amount is known as depreciation or amortization.
-used for fixed assets
-the term "net" means that depreciation has been removed from the original value of the fixed
assets.
Current Liabilities - Answer -liabilities that are expected to be paid within one year
-ex: trade payable, note payable, accrued charges
Accrued Charges - Answer -wages earned by employees but not yet paid, or taxes payable to
the federal or provincial governments
Trade Payable - Answer -represent the goods the company has bought for which payment has
not yet been made
Note Payable - Answer -represent loans that must be paid off by the company within one year
Trade Receivable - Answer -represent the amounts owed to the company by clients who have
bought goods but haven't paid for them yet.
Long-Term Liabilities - Answer -liabilities not likely to be paid off within one year; such is the
case for long-term debt.
-this debt could be in the form of bonds issued by the corporation or a term loan made by a
lender
Shareholders Equity - Answer refers to the amount contributed to the financing of the
company by shareholders over time by one of two means.
-shareholders might have contributed by buying shares from the company when they were first
issued in the primary market; that is the amount indicated in the common shares account.
-all of the company's annual profits that have not been distributed to shareholders but
reinvested in the company continue to accumulate in shareholders' equity over time: these are
known as retained earnings
-common shares plus retained earnings
