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Test Bank For Intermediate Accounting (Volume 2), 8th Canadian Edition By Beechy, Conrod, Verified Chapters 12 to 22, Complete CA$26.12   Add to cart
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Test Bank For Intermediate Accounting (Volume 2), 8th Canadian Edition By Beechy, Conrod, Verified Chapters 12 to 22, Complete
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Beechy/Conrod, Intermediate Accounting (Volume 2), 8th Edition TEST BANK, Complete Chapters 12 - 22, Verified Latest Version Test Bank For Intermediate Accounting (Volume 2), 8th Canadian Edition By Beechy, Conrod, Verified Chapters 12 to 22, Complete Newest Version TEST BANK For Intermediate Ac...

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  • May 24, 2024
  • 502
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

Subjects

  • intermediate accounting
  • beechy conrod intermediate accounting volume 2
  • intermediate accounting 8th edition test bank
  • intermediate accounting 8th edition by beechy
  • intermediate accounting by beechy

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TEST BANK
Intermediate Accounting (Volume 2),
8th Canadian Edition
By Thomas H. Beechy, Joan E. Conrod, All Chapters 12 - 22

,TABLE OF CONTENTS
VOLUME 2


Chapter 12: Financial Liabilities and Provisions

Chapter 13: Financial Instruments: Long-Term Debt
Chapter 14: Shareholders' Equity

Chapter 15: Financial Instruments: Complex Debt and Equity

Chapter 16: Corporate Income Tax
Chapter 17: Tax Losses

Chapter 18: Leases

Chapter 19: Post-Employment Benefits
Chapter 20: Earnings per Share

Chapter 21: Accounting Changes

Chapter 22: Financial Statement Analysis

,Chapter 12
Student name:
1) Conceptually, liabilities constitute a present obligation as a result of a past event and entail an
expected future sacrifice of assets or services.
⊚ true


⊚ false
2) Under ASPE, only legal obligations are recognized.
⊚ true


⊚ false

3) A reasonable expectation on the part of a company's stakeholders arising from a company's
past practices or behaviour may constitute a constructive obligation in certain instances.
⊚ true


⊚ false

4) A contingency may become a provision if the likelihood of the contingent event greatly
increases.
⊚ true


⊚ false
5) Under IFRS, most financial liabilities are valued at fair value.
⊚ true


⊚ false

,6) An improvement to a company's credit rating under IFRS will lead to a reduction in the
carrying amount of any financial liabilities and a gain being reported in OCI.
⊚ true


⊚ false
7) Loan guarantees are only recorded if they are likely to be paid.
⊚ true


⊚ false

8) For a small population, the best estimate for the amount of a provision that must be
recognized is the expected value of the possible outcomes.
⊚ true


⊚ false
9) Under IFRS, provisions are always recorded at their expected value.
⊚ true


⊚ false

10) For a large population, the best estimate for the amount of a provision that must be
recognized is the most likely outcome with respect to the expected value and cumulative
probabilities.
⊚ true


⊚ false

11) Under ASPE, contingent liabilities which are more likely than not, are accrued at the lowest
end of the range.
⊚ true


⊚ false

,12) Executory contracts seldom require a journal entry, while onerous contracts do.
⊚ true


⊚ false

13) Discounting is not required when the time value of money is immaterial or if the amount and
timing of cash flows is highly uncertain.
⊚ true


⊚ false

14) Financial liabilities are initially recognized at fair value and at cost, amortized cost or fair
value post-acquisition.
⊚ true


⊚ false

15) A company decides to relocate a group from a discontinued business segment to a division
with ongoing operations. The expenses incurred in doing so would qualify as a restructuring
charge.
⊚ true


⊚ false

16) Under the warranty expense approach, there should be no income statement effects for
warranty repairs performed after the year of sale (assuming that accrued warranty expenses
and expenditures equal one another).
⊚ true


⊚ false

,17) Under the warranty revenue approach, there should be no income statement effects for
warranty repairs performed after the year of sale (assuming that accrued warranty expenses
and expenditures equal one another).
⊚ true


⊚ false

18) An onerous contract is one where the unavoidable costs of meeting the contract may or may
not exceed the benefits derived from the contract.
⊚ true


⊚ false

19) A lawsuit in progress wherein the defendant will probably be found guilty would likely be
accounted for as a provision.
⊚ true


⊚ false
20) Warranties provisions may arise from legal or constructive obligations.
⊚ true


⊚ false

21) Once a company has formally decided to restructure its operations, a provision must be made
for the restructuring.
⊚ true


⊚ false
22) Self-insurance costs for expected losses must never be provided for.
⊚ true


⊚ false
23) Current liabilities are usually discounted.
⊚ true


⊚ false

,24) A decline in value of a company's reporting currency relative to the foreign currency in
which it has payables will result in a foreign exchange gain on the reporting company's
books.
⊚ true


⊚ false
25) Adjustments to fair value relating to FVTPL liabilities will always flow through earnings.
⊚ true


⊚ false

26) Loan guarantees must be provided for; the amount of the provision is the probability of
payout multiplied by the fair value of the loan guarantee.
⊚ true


⊚ false

27) A company may reclassify a current financial liability to a long-term one only if there is a
contractual agreement in place by the reporting date to replace the financing.
⊚ true


⊚ false
28) Debt issue costs may be expensed or included in the cost of the debt.
⊚ true


⊚ false
29) Normal business risks that are insured must be provided for.
⊚ true


⊚ false

30) An administrative fee pertaining to an unsuccessful loan application is to be immediately
expensed.
⊚ true


⊚ false

,31) Capitalization of borrowing costs on qualifying assets will continue even if work on the asset
has temporarily ceased.
⊚ true


⊚ false

32) Accounts payable should include only obligations directly related to the primary and
continuing operations of an entity.
⊚ true


⊚ false

33) Capitalization of borrowing costs on qualifying assets is mandatory under both IFRS and
ASPE.
⊚ true


⊚ false

34) Under IFRS, a loss contingency must be credited to a liability account only if the occurrence of
the contingent event is probable and if the amount of loss can be reasonably estimated.
⊚ true


⊚ false

35) A gain contingency will usually not be recorded in the accounts and reported in the financial
statements even though its occurrence is probable.
⊚ true


⊚ false

36) Under ASPE, disclosure in the footnotes to the financial statements is the only way to
properly report contingent losses.
⊚ true


⊚ false
37) Under IFRS, a continuity schedule must be provided for both provisions and contingencies.
⊚ true


⊚ false

, 38) A brewing company operating in an Ontario city experiencing water shortages received its water
bill for December 2023, on December 31, 2023. The bill ($8,000) represents the cost of water
used in December to make its product. The company will not publish the 2023 financial
statements until February 2024. Therefore, the adjusting entry as of December 31, 2023 includes
which of the following?
A) cr. utilities payable $8,000
B) cr. cash $8,000
C) cr. utilities expense $8,000
D) no adjusting entry needed because the bill will not be paid until January 2024



39) A short-term note payable may include all of the following except:
A) Trade notes payable.
B) Non trade notes payable.
C) A current portion of a long-term liability.
D) Unearned revenue.



40) Which of the following statements is correct?
A) Under IFRS, contingencies may be accrued, but not under ASPE.
B) Litigation for which the company will probably be found guilty would normally be
accrued as a provision.
C) Under IFRS, content gains should be recognized if they are reasonably certain to
occur.
D) A contingency is more likely to require an accrual than a provision.



41) A firm sold $100,000 worth of goods during 2024. The firm extends warranty coverage on
these goods. Historically, warranty costs have averaged 2% of total sales. During 2024, the
firm incurred $1,000 to service goods sold in 2023 and $200 to service goods sold in 2024.
What is warranty expense for 2024?
A) $200
B) $1,200
C) $2,000
D) $3,200

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