Solution Manual for Intermediate Accounting (Volume 2), 8th Canadian Edition By Thomas H. Beechy, Joan E. Conrod / Verified All Chapters (12 - 22)Complete Newest Version

Test bank for:
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Intermediate Accounting Volume 2 8th Edition Beechy
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Conrod Farrell Complete Guide Accounting Solutions
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PDF
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,Chapter 12 b




Studentname: b




1) Conceptually, liabilities constitute apresent obligation as a result of a past event and entail an
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b expected future sacrifice of assets or services.
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⊚ true b




⊚ false b




2) Under ASPE, only legal obligations are recognized.
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⊚ true b




⊚ false b




3) A reasonable expectation on the part of a company's stakeholders arising from a company's past
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b practices or behaviour may constitute a constructive obligation in certain instances.
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⊚ true b




⊚ false b




4) A contingency may become a provision if the likelihood of the contingent event greatly
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b increases.
⊚ true b




⊚ false b




5) Under IFRS, most financial liabilities are valued at fair value.
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⊚ true b




⊚ false b

,6) An improvement to a company's credit rating under IFRS will lead to a reduction in the
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b carrying amount of any financial liabilities and a gain being reported in OCI.
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⊚ true b




⊚ false b




7) Loan guarantees are only recorded if they are likely to be paid.
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⊚ true b




⊚ false b




8) Accrued liabilities made due to routine operating expenses are not normally discounted.
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⊚ true b




⊚ false b




9) For a small population, the best estimate for the amount of a provision that must be
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b recognized is the expected value of the possible outcomes.
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⊚ true b




⊚ false b




10) Under IFRS, provisions are always recorded at their expected value.
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⊚ true b




⊚ false b




11) For a large population, the best estimate for the amount of a provision that must be
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b recognized is the most likely outcome with respect to the expected value and cumulative
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b probabilities.
⊚ true b




⊚ false b




12) Under ASPE, contingent liabilities which are more likely than not, are accrued at the lowest end
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b of the range.
b b




⊚ true b




⊚ false b

, 13) Contingent assets may be recorded under ASPE but not under IFRS.
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⊚ trueb




⊚ false
b




14) Executory contracts seldom require a journal entry, while onerous contracts do.
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⊚ trueb




⊚ false
b




15) Discounting is not required when the time value of money is immaterial or if the amount and
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b timing of cash flows is highly uncertain.
b b b b b b




⊚ true b




⊚ false
b




16) Financial liabilities are initially recognized at fair value and at cost, amortized cost or fair value
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b post-acquisition.
⊚ true b




⊚ false
b




17) A company decides to relocate a group from a discontinued business segment to a division with
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ongoing operations. The expenses incurred in doing so would qualify as a restructuring charge.
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⊚ true b




⊚ false
b




18) Under the warranty expense approach, there should be no income statement effects for
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b warranty repairs performed after the year of sale (assuming that accrued warranty expenses and
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b expenditures equal one another). b b b




⊚ true b




⊚ false
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