Test Bank for Intermediate Accounting ( Volume 1) 8th Edition By Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel / All Chapter (1-11) A+

Test Bank for
Intermediate Accounting Volume 1 8E Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell,
Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
Chapter 1-11 Answers are at the end of Each Chapter

Chapter 1

Student name:__________
1) The main purpose of financial accounting is to communicate useful financial information to
decision-makers both inside and outside of the business organization.
⊚ true
⊚ false



2) The Canadian Business Corporations Act mandates that all incorporated companies in
Canada follow IFRS.
⊚ true
⊚ false



3) Private companies in Canada may choose between IFRS or ASPE.
⊚ true
⊚ false



4) Canada has adapted its own pre-existing standards for public companies to IFRS, while the
U.S has adopted IFRS completely.
⊚ true
⊚ false



5) A disclosed basis of accounting (DBA) is acceptable if a company's financial statements are
prepared solely for internal use.
⊚ true
⊚ false

,6) Only publicly traded companies in Canada are required to adopt IFRS.
⊚ true
⊚ false



7) Earnings quality is said to be high when most of a company's earnings are the result of its
continuing operations.
⊚ true
⊚ false



8) Income tax deferral is illegal in Canada.
⊚ true
⊚ false



9) In Canada, income for tax and accounting purposes may be different.
⊚ true
⊚ false



10) External users of a company's financial statements may have conflicting objectives.
⊚ true
⊚ false



11) In Canada, IFRS standards were essentially converged with Canadian GAAP.
⊚ true
⊚ false



12) A company's functional currency is always the currency in which the financial statements are
presented.
⊚ true
⊚ false

,13) It is acceptable for publicly traded Canadian companies to report under US GAAP.
⊚ true
⊚ false



14) In Canada, almost all equity financing for both public and private companies is done through
private placements.
⊚ true
⊚ false



15) IFRS standards may be modified to allow for a disclosed basis of accounting (DBA).
⊚ true
⊚ false



16) Privately held for-profit enterprises with a fiduciary responsibility have a choice between
IFRS and ASPE.
⊚ true
⊚ false



17) Mutual fund companies, which may be privately held, are deemed to have a fiduciary
responsibility and must therefore comply with IFRS.
⊚ true
⊚ false



18) Canadian companies must always present their financial results in Canadian dollars.
⊚ true
⊚ false



19) Canadian corporations are prohibited from using U.S. GAAP.
⊚ true
⊚ false

, 20) A company's reporting currency is the currency in which it conducts most of its business.
⊚ true
⊚ false



21) The disclosed basis of accounting (DBA) refers to the use of Non-GAAP accounting policies
by private companies.
⊚ true
⊚ false



22) A company's presentation currency can differ from its functional currency.
⊚ true
⊚ false



23) The accounting standards for private enterprises (ASPE) are essentially a scaled-down
version of the CPA Handbook, which is available to all small and medium sized enterprises
with no fiduciary responsibility.
⊚ true
⊚ false



24) 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.
⊚ true
⊚ false



25) The influence of tax rules when selecting appropriate accounting treatment for a transaction
is particularly strong with public companies.
⊚ true
⊚ false