Question 1

Going forward, there will be two sets of accounting standards for Canadian for-profit companies.

Accepted Answer

A) True 
 B)False

Question 2

In order for accounting information to be relevant, it must

Accepted Answer

A)  have very little cost. 
B)  have predictive or confirmatory value. 
C)  be comparable. 
D)  be used by a lot of different firms. 
A)  have very little cost. 
B)  have predictive or confirmatory value. 
C)  be comparable. 
D)  be used by a lot of different firms.

Question 3

Under IFRS, a company can never change its accounting policies.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would be an example of multiple performance obligations?

Accepted Answer

A)  Customer accepts delivery for a new outdoor spa tub. 
B)  Contractor is hired to fix an overhead door and replaces several parts including springs and tracks. 
C)  Customer purchases a new gas range and two-year extended warranty. 
D)  Customer purchases a family pack of tickets to the Wolves football team that includes multiple tickets for the same game. 
A)  Customer accepts delivery for a new outdoor spa tub. 
B)  Contractor is hired to fix an overhead door and replaces several parts including springs and tracks. 
C)  Customer purchases a new gas range and two-year extended warranty. 
D)  Customer purchases a family pack of tickets to the Wolves football team that includes multiple tickets for the same game.

Question 5

Which revenue recognition method would most likely be used by a retailer?

Accepted Answer

A)  point of sale 
B)  upon cash collection 
C)  during production 
D)  upon delivery 
A)  point of sale 
B)  upon cash collection 
C)  during production 
D)  upon delivery

Question 6

The organization that is working toward uniformity in accounting practices throughout the world is the

Accepted Answer

A)  World Bank. 
B)  United Nations. 
C)  International Accounting Standards Board. 
D)  National Commission on Fraudulent Financial Reporting. 
A)  World Bank. 
B)  United Nations. 
C)  International Accounting Standards Board. 
D)  National Commission on Fraudulent Financial Reporting.

Question 7

Sam Baker enters into a contract with Pit Company to purchase a gas fireplace unit. The sale agreement is for a total price of $ 3,000 and includes delivery of the unit, installation, and a two-year warranty. Installation successfully occurred on November 1, 2021. Pit Company often sells this gas fireplace for $ 2,500 and offers installation and warranty services at $ 500 and $ 300, respectively. Using the stand-alone fair values, what amount would be recorded as revenue on November 1, 2021 under the contract-based approach to revenue recognition? Round to the nearest whole dollar.

Accepted Answer

A)  $ 2,727 
B)  $ 2,500 
C)  $ 2,273 
D)  $ 3,000 
A)  $ 2,727 
B)  $ 2,500 
C)  $ 2,273 
D)  $ 3,000

Question 8

An item is considered to be material if

Accepted Answer

A)  the assets would be larger than the liabilities. 
B)  the information would change an investor's mind. 
C)  the company has a loss. 
D)  the company has never paid a dividend. 
A)  the assets would be larger than the liabilities. 
B)  the information would change an investor's mind. 
C)  the company has a loss. 
D)  the company has never paid a dividend.

Question 9

To make decisions about allocating capital, users look for information in the financial statements about a company's ability to maintain relationships with key customers.

Accepted Answer

A) True 
 B)False

Question 10

Match between columns
                        Premises: Two knowledgeable and independent people would agree that information is faithfully represented.
When information confirms or corrects prior expectations
Information that has a bearing on a decision
Financial information includes all necessary information to show the economic reality of the underlying transactions or events.
Assumes a company will exist long enough to carry out its existing objectives and commitments
Different companies using the same accounting principles
Appropriate for certain long-term construction contracts
A coherent system of interrelated objectives and fundamentals that can lead to consistent standards
Standard-setting body that is responsible for developing IFRS
Economic events can be identified with a particular business.
The carrying value of property, plant, and equipment is its fair value less accumulated depreciation less subsequent impairment losses.
The cost of producing the information does not exceed the value of the information.
This criterion allows revenue to be recognized when there is an increase in assets or decrease in liabilities from profit-generating activities.

Accepted Answer

The Answer of Relevance and Comparability and IASB and Confirmatory is...

Question 11

In following the application of the qualitative characteristics, which characteristic would be immediately applied after the relevance characteristic?

Accepted Answer

A)  faithful representation 
B)  comparability 
C)  timeliness 
D)  understandability 
A)  faithful representation 
B)  comparability 
C)  timeliness 
D)  understandability

Question 12

The main objective of financial reporting is to provide useful information for decision-making.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a reason for the lack of uniformity in accounting standards between countries?

Accepted Answer

A)  differences in legal systems 
B)  differences in the process for developing standards 
C)  differences in governmental requirements 
D)  all of the above 
A)  differences in legal systems 
B)  differences in the process for developing standards 
C)  differences in governmental requirements 
D)  all of the above

Question 14

Which one of the following is the main objective of financial reporting according to the conceptual framework?

Accepted Answer

A)  to provide information that will increase the value of the company 
B)  to provide information in assessing future cash flows 
C)  to provide information about the company's capital providers 
D)  to provide financial information that is useful to existing and potential investors and creditors in making decisions about a business 
A)  to provide information that will increase the value of the company 
B)  to provide information in assessing future cash flows 
C)  to provide information about the company's capital providers 
D)  to provide financial information that is useful to existing and potential investors and creditors in making decisions about a business

Question 15

When estimating amounts for accruals, it is not important that the estimate is supportable or verifiable because it is just an estimate.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises: All of the information necessary to show the economic reality of transactions is provided.
Information is available to decision makers before the information loses its ability to influence decisions.
Information is free from bias that is intended to attain a predetermined result.
Accounting information reports the economic reality of a transaction, not its legal form.
Information makes a difference in a decision.
Users are assured that the financial information shows the economic reality of the transaction.

Accepted Answer

The Answer of Neutral and Timeliness and Faithful representation and is...

Question 17

Relevant accounting information

Accepted Answer

A)  is information that has been audited. 
B)  must be reported within one year. 
C)  has been objectively determined. 
D)  is information that is capable of making a difference in a decision. 
A)  is information that has been audited. 
B)  must be reported within one year. 
C)  has been objectively determined. 
D)  is information that is capable of making a difference in a decision.

Question 18

In order for information to be useful in decision-making, the information must demonstrate relevance and faithful representation.

Accepted Answer

A) True 
 B)False

Question 19

Revenues are decreases in assets or increases in liabilities that result in a decrease in equity, other than those relating to contributions by owners.

Accepted Answer

A) True 
 B)False

Question 20

If a company provides refunds to customers for goods returned, revenue is recognized at the time of the return of the goods.

Accepted Answer

A) True 
 B)False

Going forward, there will be two sets of accounting standards for Canadian for-profit companies.

In order for accounting information to be relevant, it must

Under IFRS, a company can never change its accounting policies.

Which of the following would be an example of multiple performance obligations?

Which revenue recognition method would most likely be used by a retailer?

The organization that is working toward uniformity in accounting practices throughout the world is the

An item is considered to be material if

To make decisions about allocating capital, users look for information in the financial statements about a company's ability to maintain relationships with key customers.

In following the application of the qualitative characteristics, which characteristic would be immediately applied after the relevance characteristic?

The main objective of financial reporting is to provide useful information for decision-making.

Which of the following is a reason for the lack of uniformity in accounting standards between countries?

Which one of the following is the main objective of financial reporting according to the conceptual framework?

When estimating amounts for accruals, it is not important that the estimate is supportable or verifiable because it is just an estimate.

Relevant accounting information

In order for information to be useful in decision-making, the information must demonstrate relevance and faithful representation.

Revenues are decreases in assets or increases in liabilities that result in a decrease in equity, other than those relating to contributions by owners.

If a company provides refunds to customers for goods returned, revenue is recognized at the time of the return of the goods.

Long-Lived Assets

Current Liabilities and Payroll

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and IFRS

Non-Current Liabilities

Investments

The Cash Flow Statement

Financial Statement Analysis

Understanding Interest, Annuities, and Bond Valuation

Filters

Exam 3: Financial Reporting Concepts

Going forward, there will be two sets of accounting standards for Canadian for-profit companies.

In order for accounting information to be relevant, it must

Under IFRS, a company can never change its accounting policies.

Which of the following would be an example of multiple performance obligations?

Which revenue recognition method would most likely be used by a retailer?

The organization that is working toward uniformity in accounting practices throughout the world is the

An item is considered to be material if

To make decisions about allocating capital, users look for information in the financial statements about a company's ability to maintain relationships with key customers.

In following the application of the qualitative characteristics, which characteristic would be immediately applied after the relevance characteristic?

The main objective of financial reporting is to provide useful information for decision-making.

Which of the following is a reason for the lack of uniformity in accounting standards between countries?

Which one of the following is the main objective of financial reporting according to the conceptual framework?

When estimating amounts for accruals, it is not important that the estimate is supportable or verifiable because it is just an estimate.

Relevant accounting information

In order for information to be useful in decision-making, the information must demonstrate relevance and faithful representation.

Revenues are decreases in assets or increases in liabilities that result in a decrease in equity, other than those relating to contributions by owners.

If a company provides refunds to customers for goods returned, revenue is recognized at the time of the return of the goods.

Long-Lived Assets

Current Liabilities and Payroll

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and IFRS

Non-Current Liabilities

Investments

The Cash Flow Statement

Financial Statement Analysis

Understanding Interest, Annuities, and Bond Valuation

Filters