Test Bank for Modern Advanced Accounting In Canada 9th Edition by Hilton Murray, Herauf Darrell

1-1 FULL TEST BANK FOR Modern Advanced Accounting In Canada 9th Edition Hilton Murray, Herauf Darrell Chapter 01 Conceptual and Case Analysis Frameworks for Financial Reporting Multiple Choice Questions 1. Which of the following would NOT be a reason to o btain a greater understanding of accounting practices in other nations? A. Financial results are disclosed in different currencies. B. One needs to be aware of differing disclosure requirements from nation to nation, as this impacts the preparation of fin ancial statements. C. Income -smoothing may have affected a foreign subsidiary's results; such smoothing practices are not permitted in North America. D. Departures from the historical cost principle may be possible in other nations. Accessibility: Keybo ard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -01 Describe and apply the conceptual framework for financial reporting. Topic: 01 -01 The Conceptual Framework for Financial Reporting 2. Which of the following would be most affected by financial statements being prepared under different accounting principles? A. Reduced comparability. B. Reduced reliability. C. Increased complexity. D. Inaccurate asset valuations. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Ea sy Learning Objective: 01 -01 Describe and apply the conceptual framework for financial reporting. Topic: 01 -01 The Conceptual Framework for Financial Reporting MEDCONNOISSEUR 1-2 3. The CPA Canada Handbook - Accounting is the handbook of Canadian accounting standards. Wh y do companies in Canada ensure that their financial reporting is consistent with Canadian GAAP? A. Their bank requires them to do so. B. Their auditors require them to do so. C. Reporting under the CPA Canada Handbook - Accounting is required by public c ompanies' boards of directors. D. Compliance with the CPA Canada Handbook - Accounting pronouncements is usually required by many legal statutes. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -01 Describe and apply the conceptual framework for financial reporting. Topic: 01 -01 The Conceptual Framework for Financial Reporting 4. Which decision has Canada made with respect to financial reporting for private enterprises? A. To adopt the IFRS standards for smal l and medium -sized enterprises. B. To retain the current standards. C. To look to US GAAP for standards. D. To develop and maintain its own standards for private enterprises. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -02 Describe how accounting standards in Canada are tailored to different types of organizations. Topic: 01 -05 GAAP for Private Enterprises 5. Starting in 2011, what is the definition of a private enterprise (PE) under Canadian GAAP? A. A corporation that has no public shareholders. B. A corporation that has less than 500 shareholders and is not listed on a stock exchange. C. A corporation which is not profit oriented. D. A profit oriented enterprise that has none of its issued and outstandi ng financial instruments traded in a public market and does not hold assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01-02 Describe how accounting standards in Canada are tailored to different types of organizations. Topic: 01 -05 GAAP for Private Enterprises MEDCONNOISSEUR 1-3 6. Which enterprises must report under IFRS in Canada? A. All corporations, government agencies and private co mpanies. B. Public companies and private companies whose shareholders' equity is in excess of $500,000,000 at any particular year end. C. Public companies, private companies and not -for-profit organizations. D. Publicly accountable enterprises. Accessib ility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -02 Describe how accounting standards in Canada are tailored to different types of organizations. Topic: 01 -04 GAAP for Publicly Accountable Enterprises 7. What approach d id Canada first decide to take with respect to convergence with IFRS? A. Harmonization of CPA Canada Handbook with IFRS. B. Substituting IFRS for Canadian GAAP when approved by the IASB. C. Adopting some but not necessarily all IFRSs by reviewing them on a case by case basis. D. Reviewing them with all publically accountable entities to see which ones would be acceptable. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -02 Describe how accounting standards in C anada are tailored to different types of organizations. Topic: 01 -04 GAAP for Publicly Accountable Enterprises 8. What choice(s) do private enterprises have in their financial reporting in Canada? A. They have no choice at all; they will need to report under IFRS. B. They may elect to continue with differential reporting. C. They may adopt accounting principles that are appropriate to the circumstances. D. They may elect to report under either IFRS or ASPE but once adopted, must use all the standards. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -02 Describe how accounting standards in Canada are tailored to different types of organizations. Topic: 01 -05 GAAP for Private Enterprises MEDCONNOISSEUR 1-4 9. For which of the fo llowing types of organizations does the CPA Canada Handbook not provide specific accounting standards? A. Publicly accountable enterprises. B. Private enterprises. C. Not-for-profit organizations. D. Proprietorships. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -02 Describe how accounting standards in Canada are tailored to different types of organizations. Learning Objective: 01 -03 Identify some of the differences between IFRS and ASPE. Topic: 01 -04 GAAP fo r Publicly Accountable Enterprises Topic: 01 -05 GAAP for Private Enterprises Topic: 01 -06 GAAP for Not -for-Profit Organizations Topic: 01 -07 GAPP for Government and Other Government Organizations 10. Which of the following is NOT a reason why a Canadian private company would elect to report under IFRS? A. The company is planning to go public in the near future. B. The company seeks comparability with public companies of a similar size. C. It is likely to be less expensive than reporting under ASPE. D. The company is a subsidiary of a Canadian public company. Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01 -02 Describe how accounting standards in Canada are tailored to different types of organizations. Topic: 0 1-05 GAAP for Private Enterprises 11. The current ratio measures: A. liquidity. B. solvency. C. profitability of assets. D. profitability of owners' investment. Accessibility: Keyboard Navigation Blooms: Remember Blooms: Understand Difficulty: Easy Learning Objective: 01 -04 Analyze and interpret financial statements to assess the impact of different accounting methods on key financial statements ratios. Topic: 01 -08 Analysis and Interpretation of Financial Statements MEDCONNOISSEUR