TEST BANK For
Modern Advanced Accounting In Canada
10th Edition
By Darrell Herauf, Chima Mbagwu
Verified Chapter's 1 - 12 | Complete
1-1
,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
, 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. The60CPA60Canada60Handbook60-
60Accounting60is60the60handbook60of60Canadian60accounting60standards.60Why60do60com
panies60in60Canada60ensure60that60their60financial60reporting60is60consistent60with60Canadi
an60GAAP?
A. Their60bank60requires60them60to60do60so.
B. Their60auditors60require60them60to60do60so.
C. Reporting60under60the60CPA60Canada60Handbook60-
60Accounting60is60required60by60public60companies'60boards60of60directors.
D. Compliance60with60the60CPA60Canada60Handbook60-
60Accounting60pronouncements60is60usually60required60by60many60legal60statutes.
Accessibility:60Keyboard60Navigation6 0
Blooms:60Remember
Difficulty:60Easy
Learning60Objective:6001-
0160Describe60and60apply60the60conceptual60framework60for60financial60reporting.6 0 Topic:60
01-0160The60Conceptual60Framework60for60Financial60Reporting
4. Which60decision60has60Canada60made60with60respect60to60financial60reporting60f
or60private60enterprises?
A. To60adopt60the60IFRS60standards60for60small60and60medium-sized60enterprises.
B. To60retain60the60current60standards.
C. To60look60to60US60GAAP60for60standards.
D. To60develop60and60maintain60its60own60standards60for60private60enterprises.
Accessibility:60Keyboard60Navigation6 0
Blooms:60Remember
Difficulty:60Easy
Learning60Objective:6001-
0260Describe60how60accounting60standards60in60Canada60are60tailored60to60different60types60of60organizations.
6 0 Topic:6001-0560GAAP60for60Private60Enterprises
5. Starting60in602011,60what60 is60the60definition60of60a60private60enterprise60(PE)60under60Canadian60GAAP
A. A60corporation60that60has60no60public60shareholders.
B. A60corporation60that60has60less60than6050060shareholders60and60is60not60listed60on60a60stock60exchange.
C. A60corporation60which60is60not60profit60oriented.
D. A60profit60oriented60enterprise60that60has60none60of60its60issued60and60outstanding60fin
ancial60instruments60traded60in60a60public60market60and60does60not60hold60assets60in60a60fid
uciary60capacity60for60a60broad60group60of60outsiders60as60one60of60its60primary60business
es.
Accessibility:60Keyboard60Navigation6 0
Blooms:60Remember
Difficulty:60Easy
Learning60Objective:6001-
0260Describe60how60accounting60standards60in60Canada60are60tailored60to60different60types60of60organizations.
6 0 Topic:6001-0560GAAP60for60Private60Enterprises
1-4
Modern Advanced Accounting In Canada
10th Edition
By Darrell Herauf, Chima Mbagwu
Verified Chapter's 1 - 12 | Complete
1-1
,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
, 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. The60CPA60Canada60Handbook60-
60Accounting60is60the60handbook60of60Canadian60accounting60standards.60Why60do60com
panies60in60Canada60ensure60that60their60financial60reporting60is60consistent60with60Canadi
an60GAAP?
A. Their60bank60requires60them60to60do60so.
B. Their60auditors60require60them60to60do60so.
C. Reporting60under60the60CPA60Canada60Handbook60-
60Accounting60is60required60by60public60companies'60boards60of60directors.
D. Compliance60with60the60CPA60Canada60Handbook60-
60Accounting60pronouncements60is60usually60required60by60many60legal60statutes.
Accessibility:60Keyboard60Navigation6 0
Blooms:60Remember
Difficulty:60Easy
Learning60Objective:6001-
0160Describe60and60apply60the60conceptual60framework60for60financial60reporting.6 0 Topic:60
01-0160The60Conceptual60Framework60for60Financial60Reporting
4. Which60decision60has60Canada60made60with60respect60to60financial60reporting60f
or60private60enterprises?
A. To60adopt60the60IFRS60standards60for60small60and60medium-sized60enterprises.
B. To60retain60the60current60standards.
C. To60look60to60US60GAAP60for60standards.
D. To60develop60and60maintain60its60own60standards60for60private60enterprises.
Accessibility:60Keyboard60Navigation6 0
Blooms:60Remember
Difficulty:60Easy
Learning60Objective:6001-
0260Describe60how60accounting60standards60in60Canada60are60tailored60to60different60types60of60organizations.
6 0 Topic:6001-0560GAAP60for60Private60Enterprises
5. Starting60in602011,60what60 is60the60definition60of60a60private60enterprise60(PE)60under60Canadian60GAAP
A. A60corporation60that60has60no60public60shareholders.
B. A60corporation60that60has60less60than6050060shareholders60and60is60not60listed60on60a60stock60exchange.
C. A60corporation60which60is60not60profit60oriented.
D. A60profit60oriented60enterprise60that60has60none60of60its60issued60and60outstanding60fin
ancial60instruments60traded60in60a60public60market60and60does60not60hold60assets60in60a60fid
uciary60capacity60for60a60broad60group60of60outsiders60as60one60of60its60primary60business
es.
Accessibility:60Keyboard60Navigation6 0
Blooms:60Remember
Difficulty:60Easy
Learning60Objective:6001-
0260Describe60how60accounting60standards60in60Canada60are60tailored60to60different60types60of60organizations.
6 0 Topic:6001-0560GAAP60for60Private60Enterprises
1-4
