Modern Advanced Accounting in Canada 8th Edition Hilton Test Bank

MULTIPLEfCHOICE.ffChoosefthefonefalternativefthatfbestfcompletesfthefstatementforfanswersft
hefquestion.
1)fWhichfofftheffollowingftypesfoffsharefinvestmentfdoesfNOTfqualifyfasfafstrategicfinvestment
?
A)fControlledfinvestments.
B)fJointfControlfinvestments.
C)fInvestmentsfwithoutfsignificantfinfluence.
D)fSignificantfinfluencefinvestments.
Answer:fC
2)fAfsignificantfinfluencefinvestmentfisfonefthat:
A)fallowsfthefinvestorftofexercisefsignificantfinfluencefoverfthefstrategicfandfoperatingfpolicie
sfof
thefAssociate.
B)fallowsfthefinvestorftofexercisefsignificantfinfluencefoverfthefstrategicfoperatingfandffinanci
ng
policiesfoffthefAssociate.
C)fallowsfthefinvestorftofexercisefsignificantfinfluencefoverfonlyfthefoperatingfpoliciesfoffthe
Associate.
D)fallowsfthefinvestorftofexercisefsignificantfinfluencefoverfonlyftheffinancingfpoliciesfoffthe
Associate.
Answer:fB
3)fWhatfisfthefdominantffactorfusedftofdistinguishfportfoliofinvestmentsffromfsignificantfinflu
ence
investments?
A)fThefpercentagefoffequityfheldfbyfthefinvestor.
B)fUsefoffthefEquityfMethodftofaccountfforfandfreportfthefinvestment.
C)fThefinvestor'sfintentionftofestablishforfmaintainfaflong-
termfoperatingfrelationshipfwithfthe
investee.
D)fUsefoffthefCostfMethodftofaccountfforfandfreportfthefinvestment.
Answer:fC
4)fWhichfofftheffollowingfstatementsfisfTRUEfunderfIFRSf9?
A)fOtherfComprehensivefIncomef(OCI)fisfincludedfinfRetainedfEarnings.
B)fUnrealizedfgainsfandflossesfonfequityfinvestmentsfmayfbefincludedfinfOtherfComprehensiv
e
Incomef(OCI)fonlyfiffafdecisionftofdofsofisfmadefwhenfthefinvestmentfisfacquired.
C)fAllfunrealizedfgainsfandflossesfonfequityfinvestmentsfflowfthroughfOtherfComprehensive
Incomef(OCI).
D)fUnrealizedfgainsfandflossesfonffairfvaluefthroughfprofitfandflossf(FVTPL)fsecuritiesfare
includedfinfOtherfComprehensivefIncome.
Answer:fB
5)fGainsfandflossesfonffairfvaluefthroughfprofitforflossf(FVTPL)fsecurities:
A)farefincludedfinfnetfincomefonlyfwhenfrealized.

,B)farefneverfrecordedfuntilfthefsecuritiesfarefsold.
C)farefincludedfinfnetfincome,fregardlessfoffwhetherftheyfarefrealizedforfnot.
D)farefincludedfinfnetfincomefonlyfwhenfthefinvestmentfhasfbecomefpermanentlyfimpaired.
Answer:fC
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6)fHowfarefrealizedfgainsffromfthefsalefoffinvestmentsfaccountedfforfatffairfvaluefthroughfOthe
r
ComprehensivefIncomef(FVTOCI)faccountedfforfunderfIFRSf9?
A)fTheyfareftransferredftofRetainedfEarningsfwithoutfgoingfthroughfnetfincome.
B)fTheyfareftransferredftofnetfincomefinfthefperiodfoffthefsale.
C)fTheyfremainfinfAccumulatedfOtherfComprehensivefIncome.
D)fTheyfareftransferredftofContributedfSurplus.
Answer:fA
7)fWhenfusingfthefcostfmethodfoffaccounting,fwhichfmethodfshouldfbefusedftofdeterminefthefc
arrying
valuefoffsharesfsoldfwhenfafportionfoffthefsharesfmakingfupfanfinvestmentfisfsold?
A)fSpecificfcost.
B)fLastfin,ffirstfout.
C)fAveragefcost.
D)fFirstfin,ffirstfout.
Answer:fC
8)fWhatfpercentagefoffownershipfisfusedfasfafguidelineftofdeterminefthatfsignificantfinfluencef
exists
underfIASf28fInvestmentsfinfAssociatesfandfJointfVentures?
A)f20%forfmore.
B)fBetweenf20%fandf50%.
C)f25%forfmore.
D)fLessfthanf20%.
Answer:fB
9)fWhichfofftheffollowingfmethodsfusesfproceduresfclosestftofthosefusedfinfpreparingfconsolid
ated
financialfstatements?
A)fFairfvaluefthroughfprofitforflossf(FVTPL).
B)fThefequityfmethod.
C)fFairfvaluefthroughfotherfcomprehensivefincome.
D)fThefcostfmethod.
Answer:fB
10)fWhichfofftheffollowingfisfNOTfafpossiblefindicatorfoffsignificantfinfluence?
A)fThefAssociate'sfnewfCEOfwasfpreviouslyfCEOfoffthefinvestorfcompany.
B)fThefinvestorfhasfthefabilityftofelectfmembersftofthefBoardfoffDirectors.

,C)fThefinvestorfhasfengagedfinfnumerousfintercompanyftransactionsfwithfthefAssociate.
D)fThefinvestorfhasfthefrightftofparticipatefinfthefpolicy-makingfprocess.
Answer:fA
11)fWhichfofftheffollowingfstatementsfisfCORRECT?
A)fAnfownershipfinterestfbetweenf0fandf10%fcanfneverfimplyfsignificantfinfluence.
B)fAnfownershipfinterestfbetweenf20%fandf50%falwaysfimpliesfsignificantfinfluence.
C)fSignificantfinfluencefisfstillfpossiblefiffthefInvestorfownsflessfthanf20%foffthefvotingfsharesfo
f
thefAssociate.
D)fControlfisfonlyfpossiblefiffthefInvestorfownsfmorefthanf50%foffthefvotingfsharesfoffthe
Associate.
Answer:fC
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12)fThefdifferencefbetweenfthefinvestor'sfcostfandfthefinvestor'sfpercentagefoffthefcarryingfva
luefoffthe
netfidentifiablefassetsfoffthefassociatefisfknownfas:
A)fthefAcquisitionfDifferential.
B)fGoodwill.
C)fthefExcessfBookfValue.
D)fthefFairfValuefIncrement.
Answer:fA
13)fAnyfunallocatedfpositivefacquisitionfdifferentialfisfnormally:
A)fexpensedfduringfthefyearffollowingfthefacquisition.
B)fchargedftofRetainedfEarnings.
C)fpro-ratedfacrossfthefAssociate'sfidentifiablefnetfassets.
D)frecordedfasfGoodwill.
Answer:fD
14)fWhenfarefgainsfonfintercompanyftransfersfoffassetsfbetweenfanfinvestorfandfafsignificantfi
nfluence
investmentfrecognizedfasfpartfoffthefinvestmentfincomefaccountedfforfbyfthefparentfunderfthe
fequity

method?
A)fTheyfarefneverfrecognized.
B)fInfthefperiod(s)fwhenfthefassetsfarefsoldftofthirdfpartiesforfconsumed.
C)fInfthefperiodfwhenfthefintercompanyftransferftakesfplace.
D)fTheyfarefrecognizedfonlyfwhenfthefinvestmentfisfsold.
Answer:fB
15)fThef________finvestmentfmustfbefshownfasfafcurrentfasset,fwhereasfthefotherfinvestmentsfc
ouldfbe
currentforfnon-current,fdependingfonfmanagement'sfintention.

, A)fFVTPL
B)fcostfmethod
C)fFVTOCI
D)fequityfmethod
Answer:fA
16)fWhenfanalyzingfandfinterpretingffinancialfstatements,falthoughfthefreportingfmethodsfsh
ow
differentfvaluesfforfliquidity,fsolvency,fandfprofitability,fthefrealfeconomicfsituationfisf________ff
or
theffourfdifferentfmethods.
A)fcompletelyfdifferent
B)fexactlyfthefsame
C)falmostfsimilarfexceptfforftheffairfvaluefmethods
D)falmostfsimilarfexceptfforfthefequityfmethod
Answer:fB
17)fReportinginfaccordancefwithfthefAccountingfStandardsfforfPrivatefEnterprisesf(ASPE)fisfp
ermitted
infcertainfinstancesffor:
A)fallfCanadianfcompanies.
B)fprivatelyfheldfcompanies.
C)fpubliclyfheldfcompanies.
D)fCanadianfcompaniesfconsolidatingftheirfforeignfsubsidiaries.
Answer:fB
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18)fWhenfreportingfunderfthefAccountingfStandardsfforfPrivatefEnterprisesf(ASPE)fwhichfme
thodfmust
befusedftofreportfinvestmentsfwherefthefinvestorfhasfsignificantfinfluencefoverfthefinvestee?
A)fItfmayfusefthefcostfmethodfforfsomefsuchfinvestmentsfandfthefequityfmethodfforfotherfsuch
investments.
B)fItfmustfusefthefcostfmethodftofreportfallfsuchfinvestments.
C)fItfmustfusefthefequityfmethodftofreportfallfsuchfinvestments.
D)fItfmayfusefthefcostfmethod,fequityfmethod,forfatffairfvaluefbutfmustfaccountfforfallfsuch
investmentsfbyfthefsamefmethod.
Answer:fD
OnfJanuaryf1,f2016,fXfInc.fpurchasedf12%foffthefvotingfsharesfoffYfInc.fforf$100,000.fThefinvest
mentfis
reportedfatfcost.fXfdoesfnotfhavefsignificantfinfluencefoverfY.fY'sfnetfincomefandfdeclaredfdivid
endsfforfthe
followingfthreefyearsfarefasffollows:
NetfIncome