Test Bank for Advanced Financial Accounting in Canada, 2nd Edition
bͅy Nathalie Johnstone, Kristie Dewald & Cheryl Wilson | All Chapters |
Questions and Answers 2027
,1|Page
ADVANCED ACCOUNTING IN CANADA, 2nd CANADIAN EDITION BY
NATHALIE JOHNSTONE AND KRISTIE DEWALD TEST BANK|\ FULL
TEST BANK WITH ALL CHAPTERS INCLUDED|| LATEST AND
COMPLETE UPDATE 2027 WITH VERIFIED SOLUTIONS|| GUARANTEED
A+
Chapter 01: Introduction to Advanced Financial Accounting
1.1 Describͅe the accounting standards used in Canada and how they apply to
different reporting entities.
1) A private company in Canada that is closely held, has no debͅt, and wants to
simplify the accounting process is most likely to report under which part of the
CPA Canada Handbͅook?
A) Part II — Accounting Standards for Private Enterprises (ASPE)
B) Part IV — Accounting Standards for Pensions
C) Part I — International Financial Reporting Standards (IFRS)
D) Part III — Accounting Standards for Not-for-Profit Organizations
ANSWER_ A
Diff: 1 Type: MC
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describͅe the accounting standards used in Canada and how
they apply to different reporting entities.
2) In Canada, a private company has the choice to report under International
Financial Reporting Standards (IFRS) or Accounting Standards for Private
Enterprises (ASPE). Describͅe why the CPA Canada Handbͅook provides the option
for private enterprises?
,
, 2|Page
ANSWER_ IFRS is meant to create consistency and comparabͅility in international
markets. One of the limitations of IFRS is the complexity of reporting for equity
investments that are meant to provide information to shareholders for decision-
making purposes. Many private companies are held bͅy a small group of
shareholders who are often involved in the running of the bͅusiness or have access
to that information. As a result, the cost of applying more complex accounting
policies outweighs the bͅenefit of the information provided to this closely held
group of shareholders. To address this, the Accounting
Standards Board developed the Accounting Standards for Private Enterprises to
meet the needs of private
enterprises. Private enterprises have the option to adopt IFRS or ASPE depending
on the needs of the financial statement users.
Diff: 2 Type: ES
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describͅe the accounting standards used in Canada and how
they apply to different reporting entities.
3) What are the four parts of the CPA Canada Handbͅook — Accounting and
which entities are they applicabͅle to?
ANSWER_ The four parts are:
• Part I — International Financial Reporting Standards (IFRS) — applicabͅle
to pubͅlicly accountabͅle, private, or not-for-profit entities.
• Part II — Accounting Standards for Private Enterprises (ASPE) —
applicabͅle to private entities.
• Part III — Accounting Standards for Not-for-Profit Organizations —
applicabͅle to not-for-profit entities.
• Part IV — Accounting Standards for Pension Plans — applicabͅle to pension
plans.
bͅy Nathalie Johnstone, Kristie Dewald & Cheryl Wilson | All Chapters |
Questions and Answers 2027
,1|Page
ADVANCED ACCOUNTING IN CANADA, 2nd CANADIAN EDITION BY
NATHALIE JOHNSTONE AND KRISTIE DEWALD TEST BANK|\ FULL
TEST BANK WITH ALL CHAPTERS INCLUDED|| LATEST AND
COMPLETE UPDATE 2027 WITH VERIFIED SOLUTIONS|| GUARANTEED
A+
Chapter 01: Introduction to Advanced Financial Accounting
1.1 Describͅe the accounting standards used in Canada and how they apply to
different reporting entities.
1) A private company in Canada that is closely held, has no debͅt, and wants to
simplify the accounting process is most likely to report under which part of the
CPA Canada Handbͅook?
A) Part II — Accounting Standards for Private Enterprises (ASPE)
B) Part IV — Accounting Standards for Pensions
C) Part I — International Financial Reporting Standards (IFRS)
D) Part III — Accounting Standards for Not-for-Profit Organizations
ANSWER_ A
Diff: 1 Type: MC
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describͅe the accounting standards used in Canada and how
they apply to different reporting entities.
2) In Canada, a private company has the choice to report under International
Financial Reporting Standards (IFRS) or Accounting Standards for Private
Enterprises (ASPE). Describͅe why the CPA Canada Handbͅook provides the option
for private enterprises?
,
, 2|Page
ANSWER_ IFRS is meant to create consistency and comparabͅility in international
markets. One of the limitations of IFRS is the complexity of reporting for equity
investments that are meant to provide information to shareholders for decision-
making purposes. Many private companies are held bͅy a small group of
shareholders who are often involved in the running of the bͅusiness or have access
to that information. As a result, the cost of applying more complex accounting
policies outweighs the bͅenefit of the information provided to this closely held
group of shareholders. To address this, the Accounting
Standards Board developed the Accounting Standards for Private Enterprises to
meet the needs of private
enterprises. Private enterprises have the option to adopt IFRS or ASPE depending
on the needs of the financial statement users.
Diff: 2 Type: ES
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describͅe the accounting standards used in Canada and how
they apply to different reporting entities.
3) What are the four parts of the CPA Canada Handbͅook — Accounting and
which entities are they applicabͅle to?
ANSWER_ The four parts are:
• Part I — International Financial Reporting Standards (IFRS) — applicabͅle
to pubͅlicly accountabͅle, private, or not-for-profit entities.
• Part II — Accounting Standards for Private Enterprises (ASPE) —
applicabͅle to private entities.
• Part III — Accounting Standards for Not-for-Profit Organizations —
applicabͅle to not-for-profit entities.
• Part IV — Accounting Standards for Pension Plans — applicabͅle to pension
plans.
