Diff: 3 Type: ES
L.O.: 1-1
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
16) Canadian Tire is a publicly owned corporation. How does it differ from a privately owned corporation?
Answer: The shares of Canadian Tire can be bought or sold on the Toronto Stock Exchange without asking the permission of the other shareholders, which is not true of a private corporation. The ownership of the shares of private corporations is limited. Shares of private corporations can only be purchased with the agreement of the existing shareholders.
Private corporations are not necessarily small. For instance, The Jim Pattison Group is Canada's third largest privately held company and has 31,000 employees and annual sales of more than $6 billion.
Diff: 3 Type: ES
L.O.: 1-1
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
17) What is a not-for-profit organization?
Answer: A not-for-profit organization is organized for some other purpose than the earning of profit. Many examples are possible. For example, The Salvation Army or the University of Toronto are organized for the purpose of providing services to community stakeholders.
Many business students will eventually find employment in not-for-profit organizations or the public sector and a knowledge of accounting is just as important in these types of organizations as it is in multinational public corporations.
Diff: 3 Type: ES
L.O.: 1-1
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
18) Think about the impact accounting has on our economy and our nation. Name some external groups interested in reviewing a company's financial statements.
Answer:
∙ shareholders and other investors
∙ bankers
∙ other creditors
∙ Canada Customs and Revenue Agency
∙ other governmental agencies
∙ the general public
Diff: 1 Type: ES
L.O.: 1-1
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
1.2 Describe the purpose of each financial statement and explain the elements of each one
1) Accounting standards for accountants in Canada are established by:
A) the Canadian Institute of Chartered Professional Accountants
B) the Society of Management Accountants of Canada
C) the Certified General Accountants Association of Canada
D) the International Accounting Standards Board
Answer: A
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
2) The accounting equation can be stated as: