TEST BANK
All Chapters Included
1-1
, Modern Advanced Accounting In Canada 10th Edition By Darrell Herauf, Chim
Mbagwu Chapter's 1 - 12
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
1-2
, ANSWERS ARE AT THE END OF EACH CAPTER
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
1-3
, 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.
1-4
All Chapters Included
1-1
, Modern Advanced Accounting In Canada 10th Edition By Darrell Herauf, Chim
Mbagwu Chapter's 1 - 12
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
1-2
, ANSWERS ARE AT THE END OF EACH CAPTER
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
1-3
, 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.
1-4
