Test Bank for Intermediate Accounting Reporting and Analysis, 4th Edition by Wahlen.pdf

CHAPTER 1 m




THE CANADIAN m


FINANCIAL REPORTING ENVIRONMENT
m m




MULTIPLE CHOICE—Conceptual
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Answer No. Description
d 1. Accountingmcharacteristics.
a 2. Naturemofmfinancialmaccounting.
c 3. Definitionmofmfinancialmaccounting.
a 4. Financialmreportingmentity.
d 5. Efficientmusemofmresources.
d 6. Capitalmallocationmprocess.
c 7. Assessingmmanagementmstewardship.
c 8. Objectives mofmfinancialmreporting.
a 9. RolemofmAcSB.
c 10. Body mresponsiblemformsettingmGAAP.
b 11. Preparationmofmbiasedminformation.
d 12. Parties minstrumentalminmdevelopmentmofmreportingmstandards
.
d 13. Stakeholders minmthemfinancialmreportingmenvironment..
a 14. “Duemprocess”.
d 15. Causes mofmsubprimemlendingmcrisis.
d 16. Managementmbias.
b 17. AdoptionmofmIFRS.
c 18. RolemofmOSC.
d 19. DefinitionmofmGAAP.
b 20. Changingmnaturemofmthemeconomy.
d 21. Exercisemofmprofessionalmjudgement.
c 22. Majormfactors minmthemreportingmenvironment.
a 23. Impactmofmtechnology monmfinancialmreporting.
b 24. Naturemofmthem“BalancedmScorecard”.
a 25. Responsibility mformfinancialmstatements.
d 26. GAAPmformprivatementerprises.
d 27. Reportingmprinciples
b 28. SOX.
a 29 AcSB’s mstandardmsettingmprocess




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EXERCISES
Item Description
E1-30 Objectives mofmfinancialmreporting.
E1-31
Rolemofmsecurities mcommissions mandmstock mexchange
s.mE1-32 Usermneeds.
E1-33 Sources mofmGAAP.
E1-34 StandardmSetting.
E1-35 Challenges mfacingmfinancialmreporting.
E1-36 Stakeholders minmthemfinancialmreportingmenvironment.




TestmBank Chapter m
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Copyrightm©m2010mJohnmWileym&mSonsmCanada,mLtd.m Unauthorizedmcopying,mdistribution,mor mtransmissionmofmthismpagemis m
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, ThemCanadianmFinancialmReportingmEnvironmen 1m-m3
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MULTIPLE CHOICE—Conceptual
m




1. Themessentialmcharacteristic(s)mofmaccountingmis m(are)
a. communicationmofmfinancialminformationmtominterestedmpersons.
b. communicationmofmfinancialminformationmaboutmeconomic mentities.
c. identification,mmeasurement,mandmcommunicationmofmfinancialminformation.
d. allmofmthese.

2. Financialmaccountingmis mconcernedmwithmthemprocess mthatmculminates min
a. thempreparationmofmfinancialmreports.
b. specializedmreports mforminventory mmanagementmandmcontrol.
c. specializedmreports mformincomemtax mcalculationmandmrecognition.
d. reports monmchanges minmstock mprices mandmfuturemestimates mofmmarketmposition.

3. Financialm accountingm canm bem broadly m definedm as m them aream ofm accountingm thatm prepar
es mfinancialmstatements mtombemused
a by mparties minternalmtomthembusiness menterprisemonly.
b. by minvestors monly.
c. by mparties mbothminternalmandmexternalmtomthembusiness menterprise.
d. primarily mby mmanagement.

4. Theminformationmprovidedmby mfinancialmreportingmpertains mto
a. individualmbusiness menterprises,mrathermthanmtomindustries mormanmeconomymasmamwholem
ormtommembers mofmsociety mas mconsumers.
b. business mindustries,mrathermthanmtomindividualmenterprises mormanmeconomymasmamwholem
ormtommembers mofmsociety mas mconsumers.
c. individualmbusiness menterprises,mindustries,mandmanmeconomy mas mamwhole,mrathermthan
mtommembers mofmsociety mas mconsumers.

d. anm economy m as m am wholem andm tom membersm ofm society m as m consumers,m ratherm than
m tomindividualmenterprises mormindustries.



5. Whethermambusiness mis msuccessfulmandmthrives mis mdeterminedmby
a. freementerprise.
b. competition.
c. markets.
d. allmofmthese.

6. Anmeffectivemcapitalmallocationmprocess
a. encourages minnovation.
b. promotes mproductivity.
c. provides manmefficientmandmliquidmmarketmformbuyingmandmsellingmsecurities.
d. allmofmthese.




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7. Inmassessingmmanagementmstewardship,musers mtraditionally mrefermto
a. non-financialmmeasurements.
b. forward-lookingm data.
c. historicalmdatam.
d. nonemofmthese.

8. Whichmofmthemfollowingmstatements mis mnotmanmobjectivemofmfinancialmreporting?
a. Provideminformationmthatmis musefulmtomusers minmmakingmresourcemallocationmdecisions.
b. Provideminformationmaboutmanmentity’s meconomic mresources,mobligations,mandmequity/ne
tmassets.
c. Provideminformationmonmthemliquidationmvaluemofmanmenterprise.
d. Provideminformationmaboutmchanges minmanmentity’s meconomic mresources,mobligations,ma
ndmequity/netmassets.

9. Them rolem ofm them Accountingm Standards m Boardm (AcSB)m inm them formulationm ofm accounti
ngmprinciples minmCanadamcanmbembestmdescribedmas
a. primary.
b. secondary.
c. sometimes mprimary mandmsometimes msecondary.
d. non-existent.

10. Them body m thatm has m them responsibility m tom setm generally m acceptedm accountingm principles
m inmCanadamis mthe

a. FASB.
b. IASB.
c. AcSB.
d. OSC.

11. Thempreparationmby msomemcompanies mofmbiasedminformationmis msometimes mreferredmtomas
a. conservativemfinancialmreporting.
b. aggressivemfinancialmreporting.
c. fullmdisclosuremofmallmmaterialmfacts.
d. managementmstewardship.

12. Whichmofmthemfollowingmparties mis mnotminstrumentalminmthemdevelopmentmofmfinancialmreporti
ngmstandards minmCanada?
a. themFinancialmAccountingmStandards mBoardm(FASB)
b. themProvincialmSecurities mCommissions
c. themInternationalmAccountingmStandards mBoardm(IASB)
d. themAmericanmInstitutemofmCertifiedmPublic mAccountants

13. Whichm ofm them followingm is m notm am stakeholderm inm them Canadianm Financialm Reporti
ngmEnvironment?
a. Investors
b. Creditors
c. Auditors
d. Allmofmthesemaremstakeholders




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