ADVANCED ACCOUNTING IN CANADA, 1ST CANADIAN EDITION BY NATHALIE JOHNSTONE AND KRISTIE DEWALD TEST BANK| FULL TEST BANK WITH ALL CHAPTERS INCLUDED|| LATEST AND COMPLETE UPDATE 2025 WITH VERIFIED SOLUTIONS|| GUARANTEED A+

ADVANCED ACCOUNTING IN CANADA,
1ST CANADIAN EDITION BY NATHALIE
JOHNSTONE AND KRISTIE DEWALD
TEST BANK|\ FULL TEST BANK WITH ALL
CHAPTERS INCLUDED|| LATEST AND
COMPLETE UPDATE 2025 WITH VERIFIED
SOLUTIONS|| GUARANTEED A+

,1|P ag e


ADVANCED ACCOUNTING IN CANADA, 1ST CANADIAN EDITION BY
NATHALIE JOHNSTONE AND KRISTIE DEWALD TEST BANK|\ FULL
TEST BANK WITH ALL CHAPTERS INCLUDED|| LATEST AND
COMPLETE UPDATE 2025 WITH VERIFIED SOLUTIONS|| GUARANTEED
A+


Chapter 01: Introduction to Advanced Financial Accounting


1.1 Describe the accounting standards used in Canada and how they apply to
different reporting entities.
1) A private company in Canada that is closely held, has no debt, and wants to
simplify the accounting process is most likely to report under which part of the
CPA Canada Handbook?
A) Part II — Accounting Standards for Private Enterprises (ASPE)
B) Part IV — Accounting Standards for Pensions
C) Part I — International Financial Reporting Standards (IFRS)
D) Part III — Accounting Standards for Not-for-Profit Organizations
ANSWER_ A
Diff: 1 Type: MC


Taxonomy Category: Understanding
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how
they apply to different reporting entities.




2) In Canada, a private company has the choice to report under International
Financial Reporting Standards (IFRS) or Accounting Standards for Private
Enterprises (ASPE). Describe why the CPA Canada Handbook provides the option
for private enterprises?

,2|P ag e


ANSWER_ IFRS is meant to create consistency and comparability in international
markets. One of the limitations of IFRS is the complexity of reporting for equity
investments that are meant to provide information to shareholders for decision-
making purposes. Many private companies are held by a small group of
shareholders who are often involved in the running of the business or have access
to that information. As a result, the cost of applying more complex accounting
policies outweighs the benefit of the information provided to this closely held
group of shareholders. To address this, the Accounting
Standards Board developed the Accounting Standards for Private Enterprises to
meet the needs of private


enterprises. Private enterprises have the option to adopt IFRS or ASPE depending
on the needs of the financial statement users.
Diff: 2 Type: ES
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how
they apply to different reporting entities.


3) What are the four parts of the CPA Canada Handbook — Accounting and
which entities are they applicable to?
ANSWER_ The four parts are:
• Part I — International Financial Reporting Standards (IFRS) — applicable
to publicly accountable, private, or not-for-profit entities.
• Part II — Accounting Standards for Private Enterprises (ASPE) —
applicable to private entities.
• Part III — Accounting Standards for Not-for-Profit Organizations —
applicable to not-for-profit entities.
• Part IV — Accounting Standards for Pension Plans — applicable to pension
plans.

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