Test Bank for Advanced Accounting in Canada 1st Edition By Nathalie Johnstone, Kristie Dewald, Cheryl Wilson

ADVANCED ACCOUNTING IN CANADA, 1S f f f f




T CANADIAN EDITION BY NATHALIE JOHN
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STONE AND KRISTIE DEWALD TEST BANK
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|\ FULL TEST BANK WITH ALLCHAPTERS IN
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CLUDED|| LATEST AND COMPLETE UPDAT
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E 2025 WITH VERIFIEDSOLUTIONS|| GUAR
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ANTEED A+ f

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ADVANCED ACCOUNTING IN CANADA, 1ST CANADIAN EDITION BY NA f f f f f f f f


THALIE JOHNSTONE AND KRISTIE DEWALD TEST BANK|\ FULL TEST BA
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NK WITH ALL CHAPTERS INCLUDED|| LATEST AND COMPLETE UPDATE
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2025 WITH VERIFIED SOLUTIONS|| GUARANTEEDA+
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Chapter 01: Introduction to Advanced Financial Accounting
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1.1 Describe the accounting standards used in Canada and how they apply todifff f f f f f f f f f f f


erent reporting entities.
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1) A private company in Canada that is closely held, has no debt, and wants tosim
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plify the accounting process is most likely to report under which part of the CPA Cana
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da Handbook?
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A) Part II — Accounting Standards for Private Enterprises (ASPE)
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B) Part IV — Accounting Standards for Pensions
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C) Part I — International Financial Reporting Standards (IFRS)
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D) Part III — Accounting Standards for Not-for-Profit Organizations
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ANSWER_ A f




Diff: 1 f Type: MC f




Taxonomy Category: Understanding f f




Learning Outcome: 1.1 Describe the accounting standards used in Canada and howthe
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y apply to different reporting entities.
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2) In Canada, a private company has the choice to report under International Finan
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cial Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (AS
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PE). Describe why the CPA Canada Handbook provides the optionfor private enterpri
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ses?

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ANSWER_ IFRS is meant to create consistency and comparability in internationalma f f f f f f f f f f f


rkets. One of the limitations of IFRS is the complexity of reporting for equity investme
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nts that are meant to provide information to shareholders for decision-
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making purposes. Many private companies are held by a small group of shareholders
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who are often involved in the running of the business or have access to that information
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. As a result, the cost of applying more complex accounting policies outweighs the bene
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fit of the information provided to this closely held group of shareholders. To address thi
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s, the Accounting
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Standards Board developed the Accounting Standards for Private Enterprises tomeet t
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he needs of private
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enterprises. Private enterprises have the option to adopt IFRS or ASPE dependingon t
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he needs of the financial statement users.
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Diff: 2 f Type: ES f




Taxonomy Category: Understanding f f




Learning Outcome: 1.1 Describe the accounting standards used in Canada and howthe
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y apply to different reporting entities.
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3) What are the four parts of the CPA Canada Handbook — f f f f f f f f f f


Accounting andwhich entities are they applicable to?
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ANSWER_ The four parts are: f f f f




• Part I — International Financial Reporting Standards (IFRS) — f f f f f f f f


applicableto publicly accountable, private, or not-for-profit entities.
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• Part II — Accounting Standards for Private Enterprises (ASPE) —
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applicable to private entities.
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• Part III — Accounting Standards for Not-for-Profit Organizations —
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applicable to not-for-profit entities.
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• Part IV — Accounting Standards for Pension Plans — f f f f f f f f


applicable to pensionplans.
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Diff: 1 f Type: ES f




Taxonomy Category: Remembering f f




Learning Outcome: 1.1 Describe the accounting standards used in Canada and howthe
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y apply to different reporting entities.
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1.2 Discuss the conceptual framework for financial reporting and the generalpu
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rpose of financial reporting.
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1) In 2011, Canada adopted International Financial Reporting Standards (IFRS) forpu
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blicly accountable enterprises. Explain the rationale for adopting IFRS in Canada.
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ANSWER_ As the global economy expanded, the Accounting Standards Board (AcS
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B) chose to adopt IFRS in Canada to improve consistency and comparabilityin the inter
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national capital markets. f f




Diff: 1 f Type: ES f




Taxonomy Category: Understanding f f




Learning Outcome: 1.2 Discuss the conceptual framework for financial reportingand t
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he general purpose of financial reporting.
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1.3 Define and identify strategic and non- f f f f f


strategic intercorporate investmentsmade by reporting entities.
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1) Laliberte Products Ltd. (LPL), a public company, made several equityinv f f f f f f f f f f


estments in the current year. f f f f




Which of the following investments would most likely be classified as an associatein L
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PL's financial statements?
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