Exam 1: The Accounting Environment: What Is Accounting and Why Is It Done

International Financial Reporting Standards are:

Explain what is meant by the critical approach to accounting and why it is important.

Who are the people who examine an entity's financial information on behalf of external stakeholders?

What type of organization trades its shares on the Toronto Stock Exchange?

The critical approach to accounting is necessary primarily because:

Why is it impossible for a single accounting report to be appropriate for all situations?

You have decided to spend $75 on a "Guide to Caribbean Cruises" before booking your winter cruise holiday.This is an example of which of the following principles?

External auditors are hired by which one of the following groups?

In a public corporation, which of the following stakeholders would be the most interested in the financial statements of the entity?

Which type of organization files a business tax return?

Chris has just finished his first month at college and wants to estimate his costs for the rest of the year to ensure that the money he makes at his part-time job will cover all of his expenses.He has recorded all his cash inflows and outflows for the month as follows: Date Purpose Amount Sept 1 rent \ -350.00 Sept 2 groceries -125.50 Sept 4 out with friends -35.00 Sept 11 movie rental -5.00 Sept 15 paycheque from work 365.00 Sept 16 lunch -12.00 Sept 17 laundry -8.50 Sept 21 groceries -77.25 Sept 26 drinks for party -22.00 Sept 30 paycheque from work 302.50 Required: Prepare a statement that organizes Chris' information is a useful way.

Which of the following users would rely on management accounting information?

The CICA is the governing organization of chartered accountants in Canada.What is the most likely form of organization of the CICA?

After completing an accounting course Jessica decided to offer her services as a bookkeeper to friends and neighbours.What is the most likely form of organization of her business?

What are the owners of a corporation called?

What does IFRS stands for?

Zhang recently purchased a ladder and some painting supplies to help his mother repaint her house.He is now thinking of painting houses for the summer to earn money for school.He has the following information from his work at his mother's, plus he has given you some estimates of the amount to work he expects to do in the remainder of the summer. Cost of ladder: $300 Cost of paint supplies (brushes, rollers and pans): $200. Zhang estimates he can use half of the supplies again but will need to replace an amount equal to the rest every job. Cash paid for paint: $250.He still owes the store $150. Cost of renting DVDs to watch when he was finished for the day: $30. His mother only paid him $500, because he still lives at home, and she pointed out that his rent is free.He estimates that for a similar job he could charge $1,500.He thinks he could complete one house of a similar size per week for the 10 weeks remaining in the summer. Required: A) Is all the information Zhang has given you relevant for his decision? If not, which one(s) are not relevant? B) Is all of the information reliable? Why or why not? C) Organize the information to provide him with some feedback about how much money he has made so far this summer. D) Organize the information to allow him to predict how much money he will make in the remainder of the summer. E) Do you recommend Zhang paint houses for the summer? Why or why not?

Darnia Delaware has been making pottery as a hobby and selling it from her home to friends for several years.She has decided to open a store to sell her work and the work of others to the public.She is hoping that if the store is successful she could expand to a second location in a year's time.She has come to you for advice about how she should organize the business.A friend recommended to her that she become incorporated (operate as a corporation) but she laughed, "I am not going to get so big that I take-over the world!" Required: Compare and contrast for Darnia the advantages and disadvantages of operating as a proprietorship versus a corporation.What would you recommend to her?

Why are there different acceptable ways to account for similar transactions?

If you wanted to insure your brand new Ferrari sports car to ensure that if anything happened to it you could replace it, which of the following methods of valuing an item would be the most useful?