Test Bank for Intermediate Accounting Volume 1 8th Edition by Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel

Test Bank for
Intermediate Accounting Volume 1 8E Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell,
Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
Chapter 1-11 Answers are at the end of Each Chapter
M

Chapter 1
ED

Student name:__________
1) The main purpose of financial accounting is to communicate useful financial information to
decision-makers both inside and outside of the business organization.
⊚ true
C
⊚ false
O
2) The Canadian Business Corporations Act mandates that all incorporated companies in
Canada follow IFRS.
N
⊚ true
⊚ false
N

3) Private companies in Canada may choose between IFRS or ASPE.
⊚ true
O
⊚ false
IS
4) Canada has adapted its own pre-existing standards for public companies to IFRS, while the
U.S has adopted IFRS completely.
⊚ true
SE
⊚ false



5) A disclosed basis of accounting (DBA) is acceptable if a company's financial statements are
U
prepared solely for internal use.
⊚ true
⊚ false
R

, 6) Only publicly traded companies in Canada are required to adopt IFRS.
⊚ true
⊚ false
M
7) Earnings quality is said to be high when most of a company's earnings are the result of its
continuing operations.
⊚ true
ED
⊚ false



8) Income tax deferral is illegal in Canada.
⊚ true
C
⊚ false
O
9) In Canada, income for tax and accounting purposes may be different.
⊚ true
N
⊚ false
N
10) External users of a company's financial statements may have conflicting objectives.
⊚ true
O
⊚ false
IS
11) In Canada, IFRS standards were essentially converged with Canadian GAAP.
⊚ true
⊚ false
SE

12) A company's functional currency is always the currency in which the financial statements are
presented.
⊚ true
U
⊚ false
R

, 13) It is acceptable for publicly traded Canadian companies to report under US GAAP.
⊚ true
⊚ false
M
14) In Canada, almost all equity financing for both public and private companies is done through
private placements.
⊚ true
ED
⊚ false



15) IFRS standards may be modified to allow for a disclosed basis of accounting (DBA).
⊚ true
C
⊚ false
O
16) Privately held for-profit enterprises with a fiduciary responsibility have a choice between
IFRS and ASPE.
N
⊚ true
⊚ false
N

17) Mutual fund companies, which may be privately held, are deemed to have a fiduciary
O
responsibility and must therefore comply with IFRS.
⊚ true
⊚ false
IS

18) Canadian companies must always present their financial results in Canadian dollars.
⊚ true
SE
⊚ false



19) Canadian corporations are prohibited from using U.S. GAAP.
U
⊚ true
⊚ false
R

, 20) A company's reporting currency is the currency in which it conducts most of its business.
⊚ true
⊚ false
M
21) The disclosed basis of accounting (DBA) refers to the use of Non-GAAP accounting policies
by private companies.
⊚ true
ED
⊚ false



22) A company's presentation currency can differ from its functional currency.
⊚ true
C
⊚ false
O
23) The accounting standards for private enterprises (ASPE) are essentially a scaled-down
version of the CPA Handbook, which is available to all small and medium sized enterprises
N
with no fiduciary responsibility.
⊚ true
⊚ false
N
O
24) Different stakeholders have different reporting requirements with respect to general-purpose
financial statements. A lender will be more interested in a company's cash flows while an
investor will likely be more interested in a company's earnings.
IS
⊚ true
⊚ false
SE
25) The influence of tax rules when selecting appropriate accounting treatment for a transaction
is particularly strong with public companies.
⊚ true
⊚ false
U
R