Test Bank for Intermediate Accounting Volume 1, 8th Edition by Thomas H. Beechy

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Intermediate Accounting Volume 1 8E Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell,
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Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
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Chapter1-11Answers are at the endof Each Chapter
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1) The main purpose of financial accounting is to communicate useful financial information to
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v decision-makers both inside and outside of the business organization.
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2) The Canadian Business Corporations Act mandates that all incorporated companies in
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v Canada follow IFRS. v v




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3) Private companies in Canada may choose between IFRS or ASPE.
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4) Canada has adapted its own pre-existing standards for public companies to IFRS, while the
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U.S has adopted IFRS completely.
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5) A disclosed basis of accounting (DBA) is acceptable if a company's financial statements are
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v prepared solely for internal use.
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,6) Only publicly traded companies in Canada are required to adopt IFRS.
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7) Earnings quality is said to be high when most of a company's earnings are the result of its
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8) Income tax deferral is illegal in Canada.
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9) In Canada, income for tax and accounting purposes may be different.
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10) External users of a company's financial statements may have conflicting objectives.
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11) In Canada, IFRS standards were essentially converged with Canadian GAAP.
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12) A company's functional currency is always the currency in which the financial statements are
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v presented.
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, 13) It is acceptable for publicly traded Canadian companies to report under US GAAP.
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14) In Canada, almost all equity financing for both public and private companies is done through
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v private placements. v




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15) IFRS standards may be modified to allow for a disclosed basis of accounting (DBA).
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16) Privately held for-profit enterprises with a fiduciary responsibility have a choice between
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v IFRS and ASPE. v v




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17) Mutual fund companies, which may be privately held, are deemed to have a fiduciary
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v responsibility and must therefore comply with IFRS.
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18) Canadian companies must always present their financial results in Canadian dollars.
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19) Canadian corporations are prohibited from using U.S. GAAP.
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