TEST BANK - Beechy/Conrod, Intermediate Accounting (Volume 1) 8th Edition, Complete Chapters 1 - 11, Verified Latest Version
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Intermediate Accounting 8th edition, Beechy
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Intermediate Accounting 8th Edition, Beechy
TEST BANK - Beechy/Conrod, Intermediate Accounting (Volume 1) 8th Edition, Complete Chapters 1 - 11, Verified Latest Version Intermediate Accounting (Volume 1), 8th Canadian Edition TEST BANK By Thomas H. Beechy, Joan E. Conrod, Verified Chapters 1 - 11, Complete Newest Version TEST BANK for Interm...
TEST BANK
Intermediate Accounting (Volume 1), 8th Canadian Edition
By Thomas H. Beechy, Joan E. Conrod, Chapters 1 - 11, Complete
,
,Chapter 1
Answers are at the end of Each Chapters
Student name:
1) The main purpose of financial accounting is to communicate useful financial information to
decision-makers both inside and outside of the business organization.
⊚ true
⊚ false
2) The Canadian Business Corporations Act mandates that all incorporated companies in
Canada follow IFRS.
⊚ true
⊚ false
3) Private companies in Canada may choose between IFRS or ASPE.
⊚ true
⊚ false
4) Canada has adapted its own pre-existing standards for public companies to IFRS, while the
U.S has adopted IFRS completely.
⊚ true
⊚ false
5) A disclosed basis of accounting (DBA) is acceptable if a company's financial statements are
prepared solely for internal use.
⊚ true
⊚ false
,6) Only publicly traded companies in Canada are required to adopt IFRS.
⊚ true
⊚ false
7) Earnings quality is said to be high when most of a company's earnings are the result of its
continuing operations.
⊚ true
⊚ false
8) Income tax deferral is illegal in Canada.
⊚ true
⊚ false
9) In Canada, income for tax and accounting purposes may be different.
⊚ true
⊚ false
10) External users of a company's financial statements may have conflicting objectives.
⊚ true
⊚ false
11) In Canada, IFRS standards were essentially converged with Canadian GAAP.
⊚ true
⊚ false
12) A company's functional currency is always the currency in which the financial statements are
presented.
⊚ true
⊚ false
,13) It is acceptable for publicly traded Canadian companies to report under US GAAP.
⊚ true
⊚ false
14) In Canada, almost all equity financing for both public and private companies is done through
private placements.
⊚ true
⊚ false
15) IFRS standards may be modified to allow for a disclosed basis of accounting (DBA).
⊚ true
⊚ false
16) Privately held for-profit enterprises with a fiduciary responsibility have a choice between
IFRS and ASPE.
⊚ true
⊚ false
17) Mutual fund companies, which may be privately held, are deemed to have a fiduciary
responsibility and must therefore comply with IFRS.
⊚ true
⊚ false
18) Canadian companies must always present their financial results in Canadian dollars.
⊚ true
⊚ false
19) Canadian corporations are prohibited from using U.S. GAAP.
⊚ true
⊚ false
,20) A company's reporting currency is the currency in which it conducts most of its business.
⊚ true
⊚ false
21) The disclosed basis of accounting (DBA) refers to the use of Non-GAAP accounting policies
by private companies.
⊚ true
⊚ false
22) A company's presentation currency can differ from its functional currency.
⊚ true
⊚ false
23) The accounting standards for private enterprises (ASPE) are essentially a scaled-down
version of the CPA Handbook, which is available to all small and medium sized enterprises
with no fiduciary responsibility.
⊚ true
⊚ false
24) Different stakeholders have different reporting requirements with respect to general-purpose
financial statements. A lender will be more interested in a company's cash flows while an
investor will likely be more interested in a company's earnings.
⊚ true
⊚ false
25) The influence of tax rules when selecting appropriate accounting treatment for a transaction
is particularly strong with public companies.
⊚ true
⊚ false
,26) Due to the excellent work of the ACSB, there are very few choices among alternative
accounting policies today.
⊚ true
⊚ false
27) Cash flow prediction is a common internal user reporting objective.
⊚ true
⊚ false
28) Disclosure notes facilitate the evaluation of enterprise position and performance because they
include information, which helps to explain qualitative aspects of earnings.
⊚ true
⊚ false
29) A company that chooses to expense development cost instead of capitalizing is perceived to
have high-quality earnings.
⊚ true
⊚ false
30) Lending institutions such as banks are most interested in a company's profitability ratios.
⊚ true
⊚ false
31) Developments in accounting standards have not addressed the problem of using accounting
techniques to smooth earnings.
⊚ true
⊚ false
32) Management will choose policies that focus more on accrual basis of accounting when cash
flow assessment and prediction is a key objective.
⊚ true
⊚ false
,33) Private companies can amortize their capital assets using the CCA basis.
⊚ true
⊚ false
34) A company interested in minimizing the amount of taxes it pays would defer revenue into
later years.
⊚ true
⊚ false
35) Tax deferral objective is in the best interest of lenders and creditors but may lead to poorer
reported earnings and better cash flow.
⊚ true
⊚ false
36) The CPA Canada Handbook requires that income for tax purposes be equal to a company's
accounting income at all times.
⊚ true
⊚ false
37) The Accounting Standards Board (ACSB) is an independent group established to promulgate
accounting standards for governmental units such as provincial and civic entities.
⊚ true
⊚ false
38) The International Accounting Standards Board is responsible for the creation of International
Financial Reporting Standards used by companies whose securities are traded on
international markets.
⊚ true
⊚ false
,39) A company interested in increasing debt-to-equity ratio will prefer to capitalize than expense
the development cost.
⊚ true
⊚ false
40) Interperiod allocation makes it easier for financial statement readers to see how management
is managing the funds entrusted to its care.
⊚ true
⊚ false
41) A German company uses IFRS when reporting their consolidated results so it is
straightforward to compare their IFRS results to a Canadian competitor who also uses IFRS.
⊚ true
⊚ false
42) ASPE required companies to report using their functional currency and present using a
presentation currency.
⊚ true
⊚ false
43) The move to IFRS may still incentivize management to take a big bath since IFRS requires
assets to be written up if fair value recovers in future years.
⊚ true
⊚ false
44) If cash flow prediction is a company's primary reporting objective, this would likely result in:
A) Higher earnings.
B) Lower earnings.
C) Poor matching.
D) Fewer accruals and deferrals.
Generally accepted accounting principles currently are promulgated primarily by the:
, E) Canadian Business Corporations Act (CBCA).
F) Federal Accounting Standard Board (FASB).
G) International Accounting Standards Board (IASB).
H) Accounting Standards Board (AcSB).
45) External decision-makers include all of the following except:
A) manager
B) investor
C) creditor
D) employee
46) The users toward which financial statements are directed:
A) are very sophisticated and experienced in using financial information.
B) are independent Public Accountants.
C) have degrees in accounting and finance.
D) have a reasonable understanding of business and economic activities.
E) are Chartered Financial Analysts.
47) General-purpose financial statements report financial information relevant to:
A) investor only.
B) creditor only.
C) government user only.
D) investor, creditor and government user.
48) Users of financial statements can generally be broken down into which of the following two
categories:
A) Government and external users.
B) Government and investor.
C) Creditor and Investor.
D) External users and preparers.
What is the purpose of financial statements?
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