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Test Bank for Advanced Accounting in Canada 1st Edition by Nathalie Johnstone
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Test Bank for Advanced Accounting in Canada 1ce 1st Edition by Nathalie Johnstone; Kristie Dewald. ISBN-13: 3906 Full chapters test bank includes MCQs for all chapters 1 Introduction to Advanced Financial Accounting Canadian Accounting Standards IFRS versus ASPE Presentation in This Textboo...

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  • October 7, 2022
  • 307
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

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Advanced Accounting in Canada, 1Ce (Johnstone)
Chapter 1 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?
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.
Diff: 1 Type: ES
Taxonomy Category: Remembering
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply to different
reporting entities.



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