TEST BANK - LATEST EDITION 2025 PUBLISHED
Complete Chapters Included ✅
Complete Answers Included ✅
Short Questions Answers Included ✅
Instant Download in PDF ✅
, 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
, Chapter 01 11ce
1. Award: 10.00 points
The Conceptual Framework overrides IFRS Standards to ensure consistency with existing
accounting policies.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
2. Award: 10.00 points
ASPE is often different than IFRS due to the cost of preparing financial statements to comply with
complex standards being greater than the benefit received by users of those statements.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
,3. Award: 10.00 points
The primary emphasis of the Conceptual Framework is the proper recognition of income and
expenses.
True
False
Although the titles balance sheet or income statement is recommended in IAS 1, it is not mandatory.
Titles such as the statement of financial position or statement of profit or loss are permitted.
References
True / False Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
4. Award: 10.00 points
In which of the following situations would professional judgment NOT be required in decision
making?
Recognition of revenue.
Disclosure of information in the notes to the financial statements.
Use of IFRS or ASPE for publicly traded companies in Canada.
The making of accounting estimates.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
,5. Award: 10.00 points
Which of the following statements pertaining to generally accepted accounting principles (GAAP) in
Canada is CORRECT?
CPA Canada harmonized its accounting standards with those of the United States.
A Canadian company listed on a stock exchange in the United States (U.S.) is permitted to
use U.S. GAAP instead of IFRS.
Rate-regulated public companies (e.g., pipelines) not registered with the U.S. Securities
and Exchange Commission are required to use IFRS.
Part I (i.e., IFRS) of the CPA Canada Handbook is only to be used by publicly accountable
enterprises.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
6. Award: 10.00 points
Which of the following examples does NOT demonstrate the interrelationships of financial
statement elements?
The contribution of capital will increase an asset and increase equity.
The payment of a payable will decrease liabilities and increase assets.
Depreciation of equipment will decrease assets and decrease equity.
A sale on account will increase assets and equity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
,7. Award: 10.00 points
Which of the following statements pertaining to GAAP for publicly accountable enterprises (PAEs) is
correct?
CPA Canada and the Financial Accounting Standards Board (FASB) harmonized the
accounting standards of the United States and Canada for PAEs beginning in 1998.
PAEs include not-for-profit organizations.
PAEs include an entity, that as one of its primary businesses, holds assets in a fiduciary
capacity for a broad group of outsiders.
Commencing in 2011, most Canadian PAEs are required to elect to report under either IFRS
or ASPE on a prospective basis.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
8. Award: 10.00 points
Which of the following statements pertaining to private enterprises (PEs) is INCORRECT?
PEs with annual revenues over $10,000,000, are required to report under IFRS.
The accounting standards for a PE are included in a separate part of the CPA Canada
Handbook.
A PE is 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.
PEs may adopt either ASPE or IFRS but once a set of standards is adopted, the PEs are not
permitted to apply some standards from ASPE and others from IFRS.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
,9. Award: 10.00 points
Which of the following organizations are required to use only the IFRS (Part I) in Canada?
Public companies, private companies and not-for-profit organizations.
Government business enterprises.
All corporations, government agencies and private companies.
Public companies and private companies whose shareholders' equity is in excess of
$500,000,000 at any particular year-end.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-03 Identify some
of the differences between IFRS and
ASPE.
10. Award: 10.00 points
Which of the following statements pertaining to Not-for-Profit-Organizations (NFPO) is INCORRECT?
A non-government NFPO that applies Part III of the CPA Canada Handbook will also apply
relevant sections from Part II (ASPE) of the CPA Canada Handbook.
A non-government NFPO has a choice to follow Part I (IFRS) or Part III of the CPA Canada
Handbook.
A government NFPO has the choice to follow either the 4200 series of the CPA Canada
Public Sector Accounting (PSA) Handbook or the PSA Handbook without the 4200 series.
A government NFPO has a choice to follow Part I (IFRS) of the CPA Canada Handbook or
the CPA Canada Public Sector Accounting Handbook.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-03 Identify some
of the differences between IFRS and
ASPE.
,11. Award: 10.00 points
For which of the following types of organizations does the CPA Canada Handbook NOT provide
specific accounting standards?
Proprietorships.
Private enterprises.
Not-for-profit organizations.
Publicly accountable enterprises.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-03 Identify some
of the differences between IFRS and
ASPE.
12. Award: 10.00 points
Which of the following is NOT a reason why a Canadian private company would elect to report
under IFRS?
The company seeks comparability with public companies of a similar size.
The company is a subsidiary of a Canadian public company.
The company is planning to go public in the near future.
It is likely to be less expensive than reporting under ASPE.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
,13. Award: 10.00 points
The current ratio measures:
solvency.
profitability of assets.
profitability of owners' investment.
liquidity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
14. Award: 10.00 points
The formula for the return on equity ratio is:
current assets/current liabilities
total debt/shareholders' equity
net income/shareholders' equity
current assets - current liabilities
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
, 15. Award: 10.00 points
The debt-to-equity ratio measures:
profitability of assets.
profitability of owners' investment.
solvency.
liquidity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
16. Award: 10.00 points
Which of the following statements pertaining to the quality of financial statements or financial
reporting is FALSE?
The quality of financial statements is low if the financial statements faithfully represent
what happened during the past period.
The quality of the financial statements is low if they provide useless and unreliable
information to assess the prospects of future earnings.
The quality of financial reporting is based on how accurately the financial statements
present the actual situation of the reporting entity.
The quality of financial reporting is high if the investor is able to assess the likelihood of
making a reasonable return with an acceptable level of risk.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
Complete Chapters Included ✅
Complete Answers Included ✅
Short Questions Answers Included ✅
Instant Download in PDF ✅
, 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
, Chapter 01 11ce
1. Award: 10.00 points
The Conceptual Framework overrides IFRS Standards to ensure consistency with existing
accounting policies.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
2. Award: 10.00 points
ASPE is often different than IFRS due to the cost of preparing financial statements to comply with
complex standards being greater than the benefit received by users of those statements.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
,3. Award: 10.00 points
The primary emphasis of the Conceptual Framework is the proper recognition of income and
expenses.
True
False
Although the titles balance sheet or income statement is recommended in IAS 1, it is not mandatory.
Titles such as the statement of financial position or statement of profit or loss are permitted.
References
True / False Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
4. Award: 10.00 points
In which of the following situations would professional judgment NOT be required in decision
making?
Recognition of revenue.
Disclosure of information in the notes to the financial statements.
Use of IFRS or ASPE for publicly traded companies in Canada.
The making of accounting estimates.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
,5. Award: 10.00 points
Which of the following statements pertaining to generally accepted accounting principles (GAAP) in
Canada is CORRECT?
CPA Canada harmonized its accounting standards with those of the United States.
A Canadian company listed on a stock exchange in the United States (U.S.) is permitted to
use U.S. GAAP instead of IFRS.
Rate-regulated public companies (e.g., pipelines) not registered with the U.S. Securities
and Exchange Commission are required to use IFRS.
Part I (i.e., IFRS) of the CPA Canada Handbook is only to be used by publicly accountable
enterprises.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
6. Award: 10.00 points
Which of the following examples does NOT demonstrate the interrelationships of financial
statement elements?
The contribution of capital will increase an asset and increase equity.
The payment of a payable will decrease liabilities and increase assets.
Depreciation of equipment will decrease assets and decrease equity.
A sale on account will increase assets and equity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
,7. Award: 10.00 points
Which of the following statements pertaining to GAAP for publicly accountable enterprises (PAEs) is
correct?
CPA Canada and the Financial Accounting Standards Board (FASB) harmonized the
accounting standards of the United States and Canada for PAEs beginning in 1998.
PAEs include not-for-profit organizations.
PAEs include an entity, that as one of its primary businesses, holds assets in a fiduciary
capacity for a broad group of outsiders.
Commencing in 2011, most Canadian PAEs are required to elect to report under either IFRS
or ASPE on a prospective basis.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
8. Award: 10.00 points
Which of the following statements pertaining to private enterprises (PEs) is INCORRECT?
PEs with annual revenues over $10,000,000, are required to report under IFRS.
The accounting standards for a PE are included in a separate part of the CPA Canada
Handbook.
A PE is 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.
PEs may adopt either ASPE or IFRS but once a set of standards is adopted, the PEs are not
permitted to apply some standards from ASPE and others from IFRS.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
,9. Award: 10.00 points
Which of the following organizations are required to use only the IFRS (Part I) in Canada?
Public companies, private companies and not-for-profit organizations.
Government business enterprises.
All corporations, government agencies and private companies.
Public companies and private companies whose shareholders' equity is in excess of
$500,000,000 at any particular year-end.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-03 Identify some
of the differences between IFRS and
ASPE.
10. Award: 10.00 points
Which of the following statements pertaining to Not-for-Profit-Organizations (NFPO) is INCORRECT?
A non-government NFPO that applies Part III of the CPA Canada Handbook will also apply
relevant sections from Part II (ASPE) of the CPA Canada Handbook.
A non-government NFPO has a choice to follow Part I (IFRS) or Part III of the CPA Canada
Handbook.
A government NFPO has the choice to follow either the 4200 series of the CPA Canada
Public Sector Accounting (PSA) Handbook or the PSA Handbook without the 4200 series.
A government NFPO has a choice to follow Part I (IFRS) of the CPA Canada Handbook or
the CPA Canada Public Sector Accounting Handbook.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-03 Identify some
of the differences between IFRS and
ASPE.
,11. Award: 10.00 points
For which of the following types of organizations does the CPA Canada Handbook NOT provide
specific accounting standards?
Proprietorships.
Private enterprises.
Not-for-profit organizations.
Publicly accountable enterprises.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-03 Identify some
of the differences between IFRS and
ASPE.
12. Award: 10.00 points
Which of the following is NOT a reason why a Canadian private company would elect to report
under IFRS?
The company seeks comparability with public companies of a similar size.
The company is a subsidiary of a Canadian public company.
The company is planning to go public in the near future.
It is likely to be less expensive than reporting under ASPE.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
,13. Award: 10.00 points
The current ratio measures:
solvency.
profitability of assets.
profitability of owners' investment.
liquidity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
14. Award: 10.00 points
The formula for the return on equity ratio is:
current assets/current liabilities
total debt/shareholders' equity
net income/shareholders' equity
current assets - current liabilities
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
, 15. Award: 10.00 points
The debt-to-equity ratio measures:
profitability of assets.
profitability of owners' investment.
solvency.
liquidity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
16. Award: 10.00 points
Which of the following statements pertaining to the quality of financial statements or financial
reporting is FALSE?
The quality of financial statements is low if the financial statements faithfully represent
what happened during the past period.
The quality of the financial statements is low if they provide useless and unreliable
information to assess the prospects of future earnings.
The quality of financial reporting is based on how accurately the financial statements
present the actual situation of the reporting entity.
The quality of financial reporting is high if the investor is able to assess the likelihood of
making a reasonable return with an acceptable level of risk.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-04 Analyze and
interpret financial statements to assess
the impact of different accounting
methods on key financial statement
ratios.
