1.
Award: 10.00 points
2.
Award: 10.00 points
Rate-regulated companies are permitted to use U.S. GAAP because IASB has not yet developed its
own standards.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
ASPE is often different than IFRS due to the cost of preparing financial statements to comply with
complex standards being greater than the benefit received by users of those statements.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
3.
Award: 10.00 points
4.
Award: 10.00 points
IAS 1 has a mandatory requirement that Canadian companies use the titles balance sheet or income
statement for their financial statements.
True
False
Although the titles balance sheet or income statement is recommended in IAS 1, it is not mandatory.
Titles such as the statement of financial position or statement of profit or loss are permitted.
References
True / False Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
In which of the following situations would professional judgment NOT be required in decision
making?
Recognition of revenue.
The making of accounting estimates.
Disclosure of information in the notes to the financial statements.
Use of IFRS or ASPE for publicly traded companies in Canada.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
5.
Award: 10.00 points
6.
Award: 10.00 points
Which of the following statements pertaining to generally accepted accounting principles (GAAP) is
INCORRECT?
The process of developing GAAP is political.
If a proposal for a new financial reporting is not accepted by users, it is unlikely to become
part of GAAP.
If an entity that follows GAAP encounters transactions that are not addressed by the CPA
Canada Handbook, it is permitted to adopt accounting practices that are consistent with
industry practice.
Publicly traded companies are required to submit financial statements that comply with
GAAP to the securities commissions under which they are registered.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
Which of the following examples does NOT demonstrate the interrelationships of financial
statement elements?
A sale on account will increase assets and equity.
Depreciation of equipment will decrease assets and decrease equity.
The payment of a payable will decrease liabilities and increase assets.
The contribution of capital will increase an asset and increase equity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
7.
Award: 10.00 points
8.
Award: 10.00 points
Which of the following statements pertaining to GAAP for publicly accountable enterprises (PAEs) is
correct?
PAEs include not-for-profit organizations.
Commencing in 2011, most Canadian PAEs are required to elect to report under either IFRS
or ASPE on a prospective basis.
PAEs include an entity, that as one of its primary businesses, holds assets in a fiduciary
capacity for a broad group of outsiders.
CPA Canada and the Financial Accounting Standards Board (FASB) harmonized the
accounting standards of the United States and Canada for PAEs beginning in 1998.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
Which of the following statements pertaining to private enterprises (PEs) is INCORRECT?
PEs may adopt either ASPE or IFRS but once a set of standards is adopted, the PEs are not
permitted to apply some standards from ASPE and others from IFRS.
The accounting standards for a PE are included in a separate part of the CPA Canada
Handbook.
PEs with annual revenues over $10,000,000, are required to report under IFRS.
A PE is a profit-oriented enterprise that has none of its issued and outstanding financial
instruments traded in a public market and does not hold assets in a fiduciary capacity for a
Award: 10.00 points
2.
Award: 10.00 points
Rate-regulated companies are permitted to use U.S. GAAP because IASB has not yet developed its
own standards.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
ASPE is often different than IFRS due to the cost of preparing financial statements to comply with
complex standards being greater than the benefit received by users of those statements.
True
False
References
True / False Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
3.
Award: 10.00 points
4.
Award: 10.00 points
IAS 1 has a mandatory requirement that Canadian companies use the titles balance sheet or income
statement for their financial statements.
True
False
Although the titles balance sheet or income statement is recommended in IAS 1, it is not mandatory.
Titles such as the statement of financial position or statement of profit or loss are permitted.
References
True / False Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
In which of the following situations would professional judgment NOT be required in decision
making?
Recognition of revenue.
The making of accounting estimates.
Disclosure of information in the notes to the financial statements.
Use of IFRS or ASPE for publicly traded companies in Canada.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
5.
Award: 10.00 points
6.
Award: 10.00 points
Which of the following statements pertaining to generally accepted accounting principles (GAAP) is
INCORRECT?
The process of developing GAAP is political.
If a proposal for a new financial reporting is not accepted by users, it is unlikely to become
part of GAAP.
If an entity that follows GAAP encounters transactions that are not addressed by the CPA
Canada Handbook, it is permitted to adopt accounting practices that are consistent with
industry practice.
Publicly traded companies are required to submit financial statements that comply with
GAAP to the securities commissions under which they are registered.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
Which of the following examples does NOT demonstrate the interrelationships of financial
statement elements?
A sale on account will increase assets and equity.
Depreciation of equipment will decrease assets and decrease equity.
The payment of a payable will decrease liabilities and increase assets.
The contribution of capital will increase an asset and increase equity.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-01 Describe and
apply the conceptual framework for
financial reporting.
7.
Award: 10.00 points
8.
Award: 10.00 points
Which of the following statements pertaining to GAAP for publicly accountable enterprises (PAEs) is
correct?
PAEs include not-for-profit organizations.
Commencing in 2011, most Canadian PAEs are required to elect to report under either IFRS
or ASPE on a prospective basis.
PAEs include an entity, that as one of its primary businesses, holds assets in a fiduciary
capacity for a broad group of outsiders.
CPA Canada and the Financial Accounting Standards Board (FASB) harmonized the
accounting standards of the United States and Canada for PAEs beginning in 1998.
References
Multiple Choice Difficulty: Easy Learning Objective: 01-02 Describe how
accounting standards in Canada are
tailored to different types of
organizations.
Which of the following statements pertaining to private enterprises (PEs) is INCORRECT?
PEs may adopt either ASPE or IFRS but once a set of standards is adopted, the PEs are not
permitted to apply some standards from ASPE and others from IFRS.
The accounting standards for a PE are included in a separate part of the CPA Canada
Handbook.
PEs with annual revenues over $10,000,000, are required to report under IFRS.
A PE is a profit-oriented enterprise that has none of its issued and outstanding financial
instruments traded in a public market and does not hold assets in a fiduciary capacity for a