Exam (elaborations) TEST BANK FOR Intermediate Accounting 9th Canadian Edition

1. The essential characteristic(s) of accounting is (are) a. communication of financial information to interested persons. b. communication of financial information about economic entities. c. identification, measurement, and communication of financial information. d. all of these. 2. Financial accounting is concerned with the process that culminates in a. the preparation of financial reports. b. specialized reports for inventory management and control. c. specialized reports for income tax calculation and recognition. d. reports on changes in stock prices and future estimates of market position. 3. Financial accounting can be broadly defined as the area of accounting that prepares financial statements to be used a by parties internal to the business enterprise only. b. by investors only. c. by parties both internal and external to the business enterprise. d. primarily by management. 4. The information provided by financial reporting pertains to a. individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers. b. business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers. c. individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers. d. an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries. 5. Whether a business is successful and thrives is determined by a. free enterprise. b. competition. c. markets. d. all of these. 6. An effective capital allocation process a. encourages innovation. b. promotes productivity. c. provides an efficient and liquid market for buying and selling securities. d. all of these. hzzled Test Bank for Intermediate Accounting, Ninth Canadian Edition Test Bank Chapter 1 Copyright © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited 1 - 4 7. In assessing management stewardship, users traditionally refer to a. non-financial measurements. b. forward-looking data. c. historical data . d. none of these. 8. Which of the following statements is not an objective of financial reporting? a. Provide information that is useful to users in making resource allocation decisions. b. Provide information about an entity’s economic resources, obligations, and equity/net assets. c. Provide information on the liquidation value of an enterprise. d. Provide information about changes in an entity’s economic resources, obligations, and equity/net assets. 9. The role of the Accounting Standards Board (AcSB) in the formulation of accounting principles in Canada can be best described as a. primary. b. secondary. c. sometimes primary and sometimes secondary. d. non-existent. 10. The body that has the responsibility to set generally accepted accounting principles in Canada is the a. FASB. b. IASB. c. AcSB. d. OSC. 11. The preparation by some companies of biased information is sometimes referred to as a. conservative financial reporting. b. aggressive financial reporting. c. full disclosure of all material facts. d. management stewardship. 12. Which of the following parties is not instrumental in the development of financial reporting standards in Canada? a. the Financial Accounting Standards Board (FASB) b. the Provincial Securities Commissions c. the International Accounting Standards Board (IASB) d. the American Institute of Certified Public Accountants 13. Which of the following is not a stakeholder in the Canadian Financial Reporting Environment? a. Investors b. Creditors c. Auditors d. All of these are stakeholders hzzled The