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TEST BANK for Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald and Cheryl Wilson. ISBN-13: 9780135653906 A+ CA$20.88   Add to cart
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TEST BANK for Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald and Cheryl Wilson. ISBN-13: 9780135653906 A+

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TEST BANK for Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald and Cheryl Wilson. ISBN-13: 9780135653906 A+ TABLE OF CONTENTS Chapter 1 Introduction to Advanced Financial Ac counting Page : 9 Chapter 2 Accounting for Non-Controlled Investments Page : 50 C...

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  • November 6, 2023
  • 185
  • 2023/2024
  • Exam (elaborations)
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  • 9780132928939
  • canada
  • 2023
  • test bank for advanced financial accounting
  • advanced financial accounting 1st edition
  • test bank for advanced accounting in canada

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Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald




TEST BANK for Advanced Accounting in Canada,

1st Canadian Edition by Nathalie

Johnstone and Kristie Dewald




Test Bank Page 1

, Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald




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

Test Bank Page 2

, Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald




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.


1.2 Discuss the conceptual framework for financial reporting and the general purpose of financial

reporting.


1) In 2011, Canada adopted International Financial Reporting Standards (IFRS) for publicly accountable

enterprises. Explain the rationale for adopting IFRS in Canada.

Answer: As the global economy expanded, the Accounting Standards Board (AcSB) chose to adopt IFRS

in Canada to improve consistency and comparability in the international capital markets.


Test Bank Page 3

, Advanced Accounting in Canada, 1st Canadian Edition by Nathalie Johnstone and Kristie Dewald




Diff: 1 Type: ES

Taxonomy Category: Understanding

Learning Outcome: 1.2 Discuss the conceptual framework for financial reporting and the general purpose of

financial reporting.



1.3 Define and identify strategic and non-strategic intercorporate investments made by reporting

entities.



1) Laliberte Products Ltd. (LPL), a public company, made several equity investments in the current year.

Which of the following investments would most likely be classified as an associate in LPL's financial

statements?

A) 25,000 of the 30,000 outstanding voting common shares of Glabman Inc. There are significant

intercompany transactions between the two companies.

B) 13,500 of the 45,000 outstanding voting common shares of CCL Ltd. There are significant intercompany

transactions between the two companies.

C) 1,000 of the 20,000 outstanding voting common shares of Petruck Inc. There are no transactions

between the two corporations and LPL plans to hold these shares for less than a year.

D) 3,000 of the 3,500 outstanding non-voting preferred shares of Paradise Ltd. There is a small number of

intercompany transactions between the two companies.

Answer: B

Diff: 2 Type: MC

Taxonomy Category: Analyzing

Learning Outcome: 1.3 Define and identify strategic and non-strategic intercorporate investments made by

reporting entities.



2) What is the definition of control provided in IFRS 10?

Answer: IFRS 10 states that an investee has control only when all of the following three criteria are met:


Test Bank Page 4

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