BUS 251 Midterm Practice Terms
Questions with Accurate Verified
Solutions (2025) Updated.
Working Capital - Answer Current Assets - Current Liabilities
- used to measure a company's ability to meet short term debts or obligations
Characteristics of an Asset - Answer 1.) It is a resource controlled by an entity.
2.) The company expects future economic benefits from the use or sale of the resource .
3.) The event that gave the company control of the resource has already happened.
Characteristics of a Liability - Answer 1.) It is a present obligation of the entity.
2.) The company expects to settle it through an outflow of resources that represent future
economic benefits.
3.) The obligation results from an event that has already happened
Shareholders Equity - Answer The net assets that would remain after all liabilities are settled.
Why would a shareholder be interested in shareholder equity. - Answer Shareholder equity
allows the shareholder to understand how much money would be for shareholders in the
company if it was ever to go bankrupt.
All Canadian public companies use what standards to prepare their financial statements? -
Answer International Financial Reporting Standards
Private Canadian companies follow what accounting standard? - Answer Accounting Standards
for Private Enterprises (ASPE)
What are the objectives of the ASPE and IFRS ? - Answer - Produce financial statements that
are useful to the financial statement users.
- Focus on the need of the shareholder and creditors.
, What is the ACSB responsible for? - Answer Developing and establishing the accounting
standards in Canada.
Who's responsibility is it to maintain the IFRS ( International Financial Reporting Standards ) -
Answer The IASB, International Accounting Standards Board.
What are the concepts and objectives that IASB and ACSB base their standards on? - Answer
1.) To assist organizations as they develop new financial reporting standards.
2.) To assist accountants in determining how to account for items for which no specific
accounting standards have been developed.
3.) To assist users in their interpretation of the information contained in the financial
statements.
Financial Information must be? - Answer Relevant and Represent Faithfully
Relevance and Faithfulness are? - Answer Qualitative Characteristics
What are the enhancing qualitative characteristics? - Answer 1.) Comparability
2.) Verify ability
3.) Timeliness
4.) Understand-ability
Standard setters look at whether information is? - Answer Predictive in Value or has
confirmatory value.
Predictive Information - Answer Information that users can use as the basis of developing
expectations about the company's future.
Confirmatory Value - Answer Information provides relevant feedback to users on their
previous assessments of the company.
Materiality - Answer Information has material if it provides information that would effect the
Questions with Accurate Verified
Solutions (2025) Updated.
Working Capital - Answer Current Assets - Current Liabilities
- used to measure a company's ability to meet short term debts or obligations
Characteristics of an Asset - Answer 1.) It is a resource controlled by an entity.
2.) The company expects future economic benefits from the use or sale of the resource .
3.) The event that gave the company control of the resource has already happened.
Characteristics of a Liability - Answer 1.) It is a present obligation of the entity.
2.) The company expects to settle it through an outflow of resources that represent future
economic benefits.
3.) The obligation results from an event that has already happened
Shareholders Equity - Answer The net assets that would remain after all liabilities are settled.
Why would a shareholder be interested in shareholder equity. - Answer Shareholder equity
allows the shareholder to understand how much money would be for shareholders in the
company if it was ever to go bankrupt.
All Canadian public companies use what standards to prepare their financial statements? -
Answer International Financial Reporting Standards
Private Canadian companies follow what accounting standard? - Answer Accounting Standards
for Private Enterprises (ASPE)
What are the objectives of the ASPE and IFRS ? - Answer - Produce financial statements that
are useful to the financial statement users.
- Focus on the need of the shareholder and creditors.
, What is the ACSB responsible for? - Answer Developing and establishing the accounting
standards in Canada.
Who's responsibility is it to maintain the IFRS ( International Financial Reporting Standards ) -
Answer The IASB, International Accounting Standards Board.
What are the concepts and objectives that IASB and ACSB base their standards on? - Answer
1.) To assist organizations as they develop new financial reporting standards.
2.) To assist accountants in determining how to account for items for which no specific
accounting standards have been developed.
3.) To assist users in their interpretation of the information contained in the financial
statements.
Financial Information must be? - Answer Relevant and Represent Faithfully
Relevance and Faithfulness are? - Answer Qualitative Characteristics
What are the enhancing qualitative characteristics? - Answer 1.) Comparability
2.) Verify ability
3.) Timeliness
4.) Understand-ability
Standard setters look at whether information is? - Answer Predictive in Value or has
confirmatory value.
Predictive Information - Answer Information that users can use as the basis of developing
expectations about the company's future.
Confirmatory Value - Answer Information provides relevant feedback to users on their
previous assessments of the company.
Materiality - Answer Information has material if it provides information that would effect the
