Test Bank for Modern Advanced Accounting in Canada (10th Edition by Darrell Herauf & Chima Mbagwu) | Chapters 1–12 Verified | Complete 2025 Edition

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ADVANCED ACCOUNTING IN CANADA, 1ST CANADIAN EDITION BY NA 1 1 1 1 1 1 1 1



THALIE JOHNSTONE AND KRISTIE DEWALD TEST BANK|\ FULL TEST BA
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NK WITH ALL CHAPTERS INCLUDED|| LATEST AND COMPLETE UPDATE
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2025 WITH VERIFIED SOLUTIONS|| GUARANTEED A+
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Chapter 01: Introduction to Advanced Financial Accounting
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1.1 Describe the accounting standards used in Canada and how they apply to dif 1 1 1 1 1 1 1 1 1 1 1 1



ferent reporting entities.
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1) A private company in Canada that is closely held, has no debt, and wants to sim
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plify the accounting process is most likely to report under which part of the CPA Can
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ada Handbook?
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A) Part II — Accounting Standards for Private Enterprises (ASPE)
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B) Part IV — Accounting Standards for Pensions
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C) Part I — International Financial Reporting Standards (IFRS)
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D) Part III — Accounting Standards for Not-for-Profit Organizations
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ANSWER_ A 1




Diff: 1 1 Type: MC 1




Taxonomy Category: Understanding 1 1




Learning Outcome: 1.1 Describe the accounting standards used in Canada and how the
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y apply to different reporting entities.
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2) In Canada, a private company has the choice to report under International Fina
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ncial Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (A
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SPE). Describe why the CPA Canada Handbook provides the option for private enterp
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rises?

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ANSWER_ IFRS is meant to create consistency and comparability in international m1 1 1 1 1 1 1 1 1 1 1



arkets. One of the limitations of IFRS is the complexity of reporting for equity invest
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ments that are meant to provide information to shareholders for decision-
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making purposes. Many private companies are held by a small group of shareholders
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who are often involved in the running of the business or have access to that informatio
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n. As a result, the cost of applying more complex accounting policies outweighs the be
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nefit of the information provided to this closely held group of shareholders. To addres
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s this, the Accounting
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Standards Board developed the Accounting Standards for Private Enterprises to meet t
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he needs of private
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enterprises. Private enterprises have the option to adopt IFRS or ASPE depending on t
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he needs of the financial statement users.
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Diff: 2 1 Type: ES 1




Taxonomy Category: Understanding 1 1




Learning Outcome: 1.1 Describe the accounting standards used in Canada and how the
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y apply to different reporting entities.
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3) What are the four parts of the CPA Canada Handbook — 1 1 1 1 1 1 1 1 1 1



Accounting and which entities are they applicable to?
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ANSWER_ The four parts are: 1 1 1 1




• Part I — International Financial Reporting Standards (IFRS) —
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applicable to publicly accountable, private, or not-for-profit entities.
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• Part II — Accounting Standards for Private Enterprises (ASPE) —
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applicable to private entities.
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• Part III — Accounting Standards for Not-for-Profit Organizations —
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applicable to not-for-profit entities.
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• Part IV — Accounting Standards for Pension Plans — 1 1 1 1 1 1 1 1



applicable to pension plans.
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Diff: 1 1 Type: ES 1




Taxonomy Category: Remembering 1 1




Learning Outcome: 1.1 Describe the accounting standards used in Canada and how the
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y apply to different reporting entities.
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1.2 Discuss the conceptual framework for financial reporting and the general p
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urpose of financial reporting. 1 1 1




1) In 2011, Canada adopted International Financial Reporting Standards (IFRS) for pu
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blicly accountable enterprises. Explain the rationale for adopting IFRS in Canada.
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ANSWER_ As the global economy expanded, the Accounting Standards Board (AcS
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B) chose to adopt IFRS in Canada to improve consistency and comparability in the int
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ernational capital markets. 1 1




Diff: 1 1 Type: ES 1




Taxonomy Category: Understanding 1 1




Learning Outcome: 1.2 Discuss the conceptual framework for financial reporting and
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the general purpose of financial reporting.
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1.3 Define and identify strategic and non- 1 1 1 1 1



strategic intercorporate investments made by reporting entities.
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1) Laliberte Products Ltd. (LPL), a public company, made several equity in 1 1 1 1 1 1 1 1 1 1



vestments in the current year. 1 1 1 1




Which of the following investments would most likely be classified as an associate in
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LPL's financial statements? 1 1