Question 1

Which of the following is NOT a primary source of GAAP?

Accepted Answer

A) Accounting sections of the CICA Handbook, PARTI. 
B) FASB accounting standards. 
C) Accounting Guidelines issued by the AcSB. 
D) Accounting sections of the CICA Handbook, PART II. 
A) Accounting sections of the CICA Handbook, PARTI. 
B) FASB accounting standards. 
C) Accounting Guidelines issued by the AcSB. 
D) Accounting sections of the CICA Handbook, PART II. B

Question 2

Maximization of net income is a common motivation of managers.

Accepted Answer

A) True 
 B)False  True

Question 3

Explain the differences between the adoption,adaption and convergence of accounting standards.

Accepted Answer

Adoption refers to the acceptance of a new set of accounting standards,as is,without modification or an intervening approvals process.Canada took this approach when adopted IFRS in 2011.The IFRS standards effectively became Part I of the CICA Handbook.
Adaption is similar to adoption with one exception.While a new set of standards may be adopted,certain standards may be changed or modified (adapted) to suit the specific environment of the nation that is endorsing these standards.Convergence is the process whereby a nation modifies its own standards to be consistent with an international standard.While the U.S did not "officially" adopt IFRS,many U.S.GAAP standards are now the same as (converged with) their IFRS counterparts.

Question 4

The stewardship function is reflected by:

Accepted Answer

A) Minimizing interperiod allocations only. 
B) Performance evaluation. 
C) Full disclosure only. 
D) Performance evaluation and minimizing interperiod allocations. 
E) Full disclosure and minimizing interperiod allocations. 
A) Minimizing interperiod allocations only. 
B) Performance evaluation. 
C) Full disclosure only. 
D) Performance evaluation and minimizing interperiod allocations. 
E) Full disclosure and minimizing interperiod allocations.

Question 5

Generally accepted accounting principles currently are promulgated primarily by the:

Accepted Answer

A) Canadian Academic Accounting Association (CAA
A)  
B) Canada Customs and Revenue Agency 
C) Ontario Securities Commission (OS
C)  
D) Accounting Standards Board (AcS
B)  
A) Canadian Academic Accounting Association (CAA
A)  
B) Canada Customs and Revenue Agency 
C) Ontario Securities Commission (OS
C)  
D) Accounting Standards Board (AcS
B)

Question 6

General-purpose financial statements report financial information relevant to:

Accepted Answer

A) investors only. 
B) creditors only. 
C) government users only. 
D) investors, creditors and government users. 
A) investors only. 
B) creditors only. 
C) government users only. 
D) investors, creditors and government users.

Question 7

The main purpose of financial accounting is to communicate useful financial information to decision-makers both inside and outside of the business organization.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following areas within the accounting field has as its main purpose serving the information needs of parties outside the reporting firm?

Accepted Answer

A) Financial accounting. 
B) Tax accounting. 
C) Managerial accounting. 
D) Auditing. 
A) Financial accounting. 
B) Tax accounting. 
C) Managerial accounting. 
D) Auditing.

Question 9

External decision-makers include all of the following except:

Accepted Answer

A) managers. 
B) owners. 
C) creditors. 
D) Employees. 
A) managers. 
B) owners. 
C) creditors. 
D) Employees.

Question 10

Which of the following is NOT a primary motivator for maximizing net income?

Accepted Answer

A) Compliance with debt covenants. 
B) To positively influence users' assessment of management performance. 
C) To enhance managers' performance-based compensation. 
D) To minimize the company's income tax liability. 
A) Compliance with debt covenants. 
B) To positively influence users' assessment of management performance. 
C) To enhance managers' performance-based compensation. 
D) To minimize the company's income tax liability.

Question 11

Creditors and analysts who attempt to assess and predict future cash flows tend to prefer earnings measures that are supported by operating cash flows taken from the Cash Flow Statement.What comparisons do they use in assessing the entity's strength in respect of operating cash flows?

Accepted Answer

Creditors and analysts often use the rep

Question 12

Instead of maximizing reported earnings,management may wish to minimize reported earnings an ongoing endeavour.Besides income tax minimization,what are some of the reasons why management would want to minimize earnings?

Accepted Answer

a) to avoid public embarrassment by redu

Question 13

Canadian companies must always present their financial results in Canadian dollars.

Accepted Answer

A) True 
 B)False

Question 14

The Accounting Standards Board (ACSB) is an independent group established to promulgate accounting standards for governmental units such as provincial and civic entities.

Accepted Answer

A) True 
 B)False

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following are major factors in the rapidly changing financial reporting environment in Canada?

Accepted Answer

A) Increased demand for accountants and the impact of technology. 
B) Globalization and the use of computer networks. 
C) The growing number of institutional investors and the knowledge based economy. 
D) Financial forecasting and planning for business. 
A) Increased demand for accountants and the impact of technology. 
B) Globalization and the use of computer networks. 
C) The growing number of institutional investors and the knowledge based economy. 
D) Financial forecasting and planning for business.

Question 17

If cash flow prediction is a company's primary reporting objective,this would likely result in:

Accepted Answer

A) Higher earnings 
B) Lower earnings 
C) Poor matching 
D) Fewer accruals and deferrals 
A) Higher earnings 
B) Lower earnings 
C) Poor matching 
D) Fewer accruals and deferrals

Question 18

Which of the following is published by the Accounting Standards Board (AcSB)?

Accepted Answer

A) Accounting Project Proposals 
B) Accounting Exposure Drafts 
C) Accounting Issues Papers 
D) CICA Handbook Sections and Accounting Guidelines 
E) Statements of Auditing Revisions 
A) Accounting Project Proposals 
B) Accounting Exposure Drafts 
C) Accounting Issues Papers 
D) CICA Handbook Sections and Accounting Guidelines 
E) Statements of Auditing Revisions

Question 19

Which of the following statement(s) is(are) correct?

Accepted Answer

A) Companies that use the disclosed basis of accounting are in effect using differential reporting. 
B) Companies that use the disclosed basis of accounting are NOT allowed to use differential reporting. 
C) When used, the disclosed basis of accounting must comply with GAAP. 
D) Both "companies that use the disclosed basis of accounting are NOT allowed to use differential reporting" and "when used, the disclosed basis of accounting must comply with GAAP" are correct. 
A) Companies that use the disclosed basis of accounting are in effect using differential reporting. 
B) Companies that use the disclosed basis of accounting are NOT allowed to use differential reporting. 
C) When used, the disclosed basis of accounting must comply with GAAP. 
D) Both "companies that use the disclosed basis of accounting are NOT allowed to use differential reporting" and "when used, the disclosed basis of accounting must comply with GAAP" are correct.

Question 20

Developments in accounting standards have not addressed the problem of using accounting techniques to smooth earnings.

Accepted Answer

A) True 
 B)False

Which of the following is NOT a primary source of GAAP?

Maximization of net income is a common motivation of managers.

Explain the differences between the adoption,adaption and convergence of accounting standards.

The stewardship function is reflected by:

Generally accepted accounting principles currently are promulgated primarily by the:

General-purpose financial statements report financial information relevant to:

The main purpose of financial accounting is to communicate useful financial information to decision-makers both inside and outside of the business organization.

Which of the following areas within the accounting field has as its main purpose serving the information needs of parties outside the reporting firm?

External decision-makers include all of the following except:

Which of the following is NOT a primary motivator for maximizing net income?

Creditors and analysts who attempt to assess and predict future cash flows tend to prefer earnings measures that are supported by operating cash flows taken from the Cash Flow Statement.What comparisons do they use in assessing the entity's strength in respect of operating cash flows?

Instead of maximizing reported earnings,management may wish to minimize reported earnings an ongoing endeavour.Besides income tax minimization,what are some of the reasons why management would want to minimize earnings?

Canadian companies must always present their financial results in Canadian dollars.

The Accounting Standards Board (ACSB) is an independent group established to promulgate accounting standards for governmental units such as provincial and civic entities.

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.

Which of the following are major factors in the rapidly changing financial reporting environment in Canada?

If cash flow prediction is a company's primary reporting objective,this would likely result in:

Which of the following is published by the Accounting Standards Board (AcSB)?

Which of the following statement(s) is(are) correct?

Developments in accounting standards have not addressed the problem of using accounting techniques to smooth earnings.

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

Exam 1: The Framework for Financial Reporting

Which of the following is NOT a primary source of GAAP?

Maximization of net income is a common motivation of managers.

Explain the differences between the adoption,adaption and convergence of accounting standards.

The stewardship function is reflected by:

Generally accepted accounting principles currently are promulgated primarily by the:

General-purpose financial statements report financial information relevant to:

The main purpose of financial accounting is to communicate useful financial information to decision-makers both inside and outside of the business organization.

Which of the following areas within the accounting field has as its main purpose serving the information needs of parties outside the reporting firm?

External decision-makers include all of the following except:

Which of the following is NOT a primary motivator for maximizing net income?

Creditors and analysts who attempt to assess and predict future cash flows tend to prefer earnings measures that are supported by operating cash flows taken from the Cash Flow Statement.What comparisons do they use in assessing the entity's strength in respect of operating cash flows?

Instead of maximizing reported earnings,management may wish to minimize reported earnings an ongoing endeavour.Besides income tax minimization,what are some of the reasons why management would want to minimize earnings?

Canadian companies must always present their financial results in Canadian dollars.

The Accounting Standards Board (ACSB) is an independent group established to promulgate accounting standards for governmental units such as provincial and civic entities.

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.

Which of the following are major factors in the rapidly changing financial reporting environment in Canada?

If cash flow prediction is a company's primary reporting objective,this would likely result in:

Which of the following is published by the Accounting Standards Board (AcSB)?

Which of the following statement(s) is(are) correct?

Developments in accounting standards have not addressed the problem of using accounting techniques to smooth earnings.

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters