TEST BANK For Modern Advanced Accounting In Canada 10th Edition By Darrell Herauf, Chima Mbagwu

TABLE OF CONTENTS CHAPTER 1 Conceptual and Case Analysis Frameworks for Financial Reporting CHAPTER 2 Investments in Equity Securities CHAPTER 3 Business Combinations CHAPTER 4 Consolidation of Non-Wholly Owned Subsidiaries CHAPTER 5 Consolidation Subsequent to Acquisition Date CHAPTER 6 Intercompany Inventory and Land Profits CHAPTER 7 (A) Intercompany Profits in Depreciable Assets (B) Intercompany Bondholdings CHAPTER 8 Consolidated Cash Flows and Changes in Ownership CHAPTER 9 Other Consolidation Reporting Issues CHAPTER 10 Foreign Currency Transactions CHAPTER 11 Translation and Consolidation of Foreign Operations CHAPTER 12 Accounting for Not-for-Profit and Public Sector Organizations 1-3 Chapter 01 Conceptual and Case Analysis Frameworks for Financial Reporting Multiple Choice Questions 1. Which of the following would NOT be a reason to obtain 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 financial 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: 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 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: Easy Learning Objective: 01-01 Describe and apply the conceptual framework for financial reporting. Topic: 01-01 The Conceptual Framework for Financial Reporting 1-4 3. The CPA Canada Handbook - Accounting is the handbook of Canadian accounting standards. Why 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 companies' 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 small 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 outstanding 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 1-5 6. Which enterprises must report under IFRS in Canada? A. All corporations, government agencies and private companies. 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. 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: 01-04 GAAP for Publicly Accountable Enterprises 7. What approach did 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 Canada are tailored to different types of organizations. Topic: 01-04 GAAP for Publicly Accountable Enterprises