Intermediate
Accounting (Volume
1), 8th Canadian
edition, 8e Beechy,
Davidson-Conrod,
Farrell, McLeod-
Dick, Tomulka, Sevel
(Test Bank all Chapters)
(Answers at the end
of each Chapter)
,Chapter 1
Student name:__________
1) If cash flow prediction is a company's primary reporting objective, this would likely
result in:
A) Higher earnings.
B) Lower earnings.
C) Poor matching.
D) Fewer accruals and deferrals.
2) Generally accepted accounting principles currently are promulgated primarily by the:
A) Canadian Business Corporations Act (CBCA).
B) Federal Accounting Standard Board (FASB).
C) International Accounting Standards Board (IASB).
D) Accounting Standards Board (AcSB).
3) External decision-makers include all of the following except:
A) manager
B) investor
C) creditor
D) employee
4) The users toward which financial statements are directed:
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, A) are very sophisticated and experienced in using financial information.
B) are independent Public Accountants.
C) have degrees in accounting and finance.
D) have a reasonable understanding of business and economic activities.
E) are Chartered Financial Analysts.
5) General-purpose financial statements report financial information relevant to:
A) investor only.
B) creditor only.
C) government user only.
D) investor, creditor and government user.
6) Users of financial statements can generally be broken down into which of the following
two categories:
A) Government and external users.
B) Government and investor.
C) Creditor and Investor.
D) External users and preparers.
7) What is the purpose of financial statements?
A) To disclose the market value of the firm's assets and liabilities.
B) To determine compliance with tax laws.
C) To identify shareholders.
D) To help users make decisions.
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, 8) Choose the correct statement about audits of corporations:
A) Outside auditors are paid by the government for auditing the financial statements of
corporations.
B) Revenue Canada performs audits of corporations' financial statements.
C) Public corporations (those whose stock are traded on exchanges) are subject to annual
audit as to their compliance with GAAP.
D) It is the employees of the firm being audited who perform the annual audit of the
financial statements of that firm.
9) Which approach did Canada take when they implemented IFRS?
A) adapt
B) adopt
C) converge
D) All these above
E) None of the above
10) The stewardship function refers to:
A) Disclosing management's use of funds and other financial information to absentee
shareholders.
B) A company's corporate citizenship track record.
C) The collection of information for planning the future of the entity, implementing those
plans, and for controlling daily operations.
D) The collection of information to help present and potential investor and creditor and
other users in assessing the amounts, timing and uncertainty of prospective cash receipts.
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