Test Bank For Modern Advanced Accounting in Canada 8th Edition By Murray Hilton

ISBN-10: 1259107035, ISBN-13: 9781259107030

Chapter No 1

Student: ___________________________________________________________________________

1. Which of the following would NOT be a reason to obtain a greater understanding of accounting practices in other nations? 
A. Financial results are disclosed in different currencies.

B. One needs to be aware of differing disclosure requirements from nation to nation, as this impacts the preparation of financial statements.

C. Income-smoothing may have affected a foreign subsidiary’s results; such smoothing practices are not permitted in North America.

D. Departures from the historical cost principle may be possible in other nations.

2. Which of the following would be most affected by financial statements being prepared under different accounting principles? 
A. Reduced comparability.

B. Reduced reliability.

C. Increased complexity.

D. Inaccurate asset valuations.

3. The CPA Canada Handbook — Accounting is the handbook of Canadian accounting standards. Why do companies in Canada ensure that their financial reporting is consistent with Canadian GAAP? 

A. Their bank requires them to do so.

B. Their auditors require them to do so.

C. Reporting under the CPA Canada Handbook – Accounting is required by public companies’ boards of directors.

D. Compliance with the CPA Canada Handbook – Accounting pronouncements is usually required by many legal statutes.

4. Which decision has Canada made with respect to financial reporting for private enterprises? 
A. To adopt the IFRS standards for small and medium-sized enterprises.

B. To retain the current standards.

C. To look to US GAAP for standards.

D. To develop and maintain its own standards for private enterprises.

5. Starting in 2011, what is the definition of a private enterprise (PE) under Canadian GAAP? 
A. A corporation that has no public shareholders.

B. A corporation that has less than 500 shareholders and is not listed on a stock exchange.

C. A corporation which is not profit oriented.

D. A profit-oriented enterprise that has none of its issued and outstanding financial instruments traded in a public market and does not hold assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses.