Question 1

In which of the following transactions would it not be appropriate to recognize an asset in the financial statements?

Accepted Answer

A) SGG receives a firm commitment from another company to purchase goods from SGG. 
B) SGG pays $10,000 to a lawyer for services to be provided next year. 
C) SGG provides services to another company, but will not be paid until after year end. 
D) A customer of SGG makes a deposit of $1,500 for goods to be custom-made. 
A) SGG receives a firm commitment from another company to purchase goods from SGG. 
B) SGG pays $10,000 to a lawyer for services to be provided next year. 
C) SGG provides services to another company, but will not be paid until after year end. 
D) A customer of SGG makes a deposit of $1,500 for goods to be custom-made. A

Question 2

Which statement is correct?

Accepted Answer

A) Private enterprises must follow IFRS. 
B) Publicly accountable enterprises must follow IFRS. 
C) Not-for-profit organizations must follow ASPE. 
D) Private enterprises must follow ASPE. 
A) Private enterprises must follow IFRS. 
B) Publicly accountable enterprises must follow IFRS. 
C) Not-for-profit organizations must follow ASPE. 
D) Private enterprises must follow ASPE. B

Question 3

What decision would users of financial information not need to make under the IFRS Framework?

Accepted Answer

A) Decide whether to invest in an entity. 
B) Information on an entity's economic performance. 
C) Amount of money to borrow from an entity. 
D) Assessment of the riskiness of cash flows. 
A) Decide whether to invest in an entity. 
B) Information on an entity's economic performance. 
C) Amount of money to borrow from an entity. 
D) Assessment of the riskiness of cash flows. C

Question 4

Fail-Safe Computer Inc. sells equipment with a 2-year warranty. Prior experience indicates that costs for warranty repairs average 3% in the first year, and 2% in the second year. Sales were $300,000 and $400,000 in fiscal 2012 and 2013 respectively. It paid $5,000 for materials and labour to make warranty-related repairs in 2012. What amount will be recorded as warranty expense in 2012?

Accepted Answer

A) $15,000 
B) $20,000 
C) $21,000 
D) $26,000 
A) $15,000 
B) $20,000 
C) $21,000 
D) $26,000

Question 5

Discuss some of the conceptual framework concepts involved in determining whether to capitalize or expense an expenditure.

Accepted Answer

Consider whether the expenditure satisfi

Question 6

During the past year, Easy Supplies Ltd's assets decreased $33,000, its liabilities decreased $41,000, its share capital increased $5,000, and Easy recorded net profit of $12,000. What was the amount of dividends declared?

Accepted Answer

A) $ 1,000 
B) $ 9,000 
C) $12,000 
D) $19,000 
A) $ 1,000 
B) $ 9,000 
C) $12,000 
D) $19,000

Question 7

Which of the following is not correct about the conceptual framework in accounting?

Accepted Answer

A) It is the basis for standard-setting for accounting standard setting bodies. 
B) It is based on fundamental accounting truths derived from the laws of nature. 
C) It can be used to solve emerging or complex accounting problems. 
D) It can be used to develop consistent and comparable accounting principles. 
A) It is the basis for standard-setting for accounting standard setting bodies. 
B) It is based on fundamental accounting truths derived from the laws of nature. 
C) It can be used to solve emerging or complex accounting problems. 
D) It can be used to develop consistent and comparable accounting principles.

Question 8

Identify the eight major components of the conceptual framework for accounting. Explain how these components interact with the demand for and supply of financial information.

Accepted Answer

•The eight components are: users of fina

Question 9

What information does the income statement provide to users of financial information under the IFRS Framework?

Accepted Answer

A) Information about changes in liabilities over a period of time. 
B) Information about changes in resources over a period of time. 
C) Information about the performance over a period of time. 
D) Information about the state of a company at a point in time. 
A) Information about changes in liabilities over a period of time. 
B) Information about changes in resources over a period of time. 
C) Information about the performance over a period of time. 
D) Information about the state of a company at a point in time.

Question 10

Which qualitative characteristic of financial information alleviates "moral hazard"?

Accepted Answer

A) Neutrality. 
B) Predictive value. 
C) Timeliness. 
D) Comparability. 
A) Neutrality. 
B) Predictive value. 
C) Timeliness. 
D) Comparability.

Question 11

What standards are not contained in the CICA Handbook?

Accepted Answer

A) Accounting standards for publicly accountable enterprises. 
B) Accounting standards for not-for-profit organizations. 
C) Accounting standards for private enterprises. 
D) MD&A standards for publicly accountable enterprises. 
A) Accounting standards for publicly accountable enterprises. 
B) Accounting standards for not-for-profit organizations. 
C) Accounting standards for private enterprises. 
D) MD&A standards for publicly accountable enterprises.

Question 12

Accelerated Earnings Inc. (Company)has an operating line of credit with the local bank that is secured by accounts receivable and inventory.
The Company purchased inventory whenever the price was low during the year and has a substantial amount on hand at year end. The inventory price has increased substantially at year end. The Controller recorded the following journal at year end:
Dr. INVENTORY 120,000
Cr. GAIN ON INVENTORY 120,000
Required:
a)Who are the users of the Company's financial statements and what is their informational need?
b)What part of the IFRS Conceptual Framework is violated by this journal entry?
c)What is the impact of this journal entry on the Company's users?
d)What correction is required?

Accepted Answer

a)The local bank is the user of the fina

Question 13

Maybel Company has a March 31, 2012 year end. Which of the following should not be recorded as a current liability?

Accepted Answer

A) A deposit received from a customer for the February 2013 rent on a 1-year lease entered into on March 1, 2011. 
B) Unpaid payroll taxes. 
C) Dividends in arrears on preferred dividends. 
D) Property taxes estimated and unpaid based on the prior year's municipal tax bill. 
A) A deposit received from a customer for the February 2013 rent on a 1-year lease entered into on March 1, 2011. 
B) Unpaid payroll taxes. 
C) Dividends in arrears on preferred dividends. 
D) Property taxes estimated and unpaid based on the prior year's municipal tax bill.

Question 14

Provide three reasons for the importance of the conceptual framework for financial reporting.

Accepted Answer

A conceptual framework is like a strateg

Question 15

Which statement best describes a publicly accountable enterprise?

Accepted Answer

A) An entity that has not issued debt instruments that are outstanding and traded in a public market. 
B) An entity that holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. 
C) An entity that has not issued equity instruments that are outstanding and traded in a public market. 
D) An entity that holds assets in a legal capacity for a broad group of outsiders as one of its primary businesses. 
A) An entity that has not issued debt instruments that are outstanding and traded in a public market. 
B) An entity that holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. 
C) An entity that has not issued equity instruments that are outstanding and traded in a public market. 
D) An entity that holds assets in a legal capacity for a broad group of outsiders as one of its primary businesses.

Question 16

Which financial statement element is being described?

Accepted Answer

The answer of Which financial statement element is being described?
...

Question 17

Which statement best describes a private enterprise?

Accepted Answer

A) Any entity that is not a publicly accountable enterprise. 
B) Any for-profit organization that is not a publicly accountable enterprise. 
C) An entity that holds assets in a legal capacity for a broad group of outsiders as one of its primary businesses. 
D) Any entity, excluding a not-for-profit organization. 
A) Any entity that is not a publicly accountable enterprise. 
B) Any for-profit organization that is not a publicly accountable enterprise. 
C) An entity that holds assets in a legal capacity for a broad group of outsiders as one of its primary businesses. 
D) Any entity, excluding a not-for-profit organization.

Question 18

Which concept of financial reporting is being described?

Accepted Answer

The answer of Which concept of financial reporting is being...

Question 19

Which is a purpose of the conceptual framework in accounting?

Accepted Answer

A) To support principles-based accounting standards, principles and practices. 
B) To provide rules from which decision-useful financial information can be developed. 
C) To promote global consistency, acceptance and adoption of IFRS around the globe. 
D) To develop different accounting practices between countries around the globe. 
A) To support principles-based accounting standards, principles and practices. 
B) To provide rules from which decision-useful financial information can be developed. 
C) To promote global consistency, acceptance and adoption of IFRS around the globe. 
D) To develop different accounting practices between countries around the globe.

Question 20

Which is an assumption of financial information in the IFRS Framework?

Accepted Answer

A) Accrual basis of accounting. 
B) Historical cost. 
C) Timeliness. 
D) Financial capital maintenance. 
A) Accrual basis of accounting. 
B) Historical cost. 
C) Timeliness. 
D) Financial capital maintenance.

In which of the following transactions would it not be appropriate to recognize an asset in the financial statements?

Which statement is correct?

What decision would users of financial information not need to make under the IFRS Framework?

Discuss some of the conceptual framework concepts involved in determining whether to capitalize or expense an expenditure.

During the past year, Easy Supplies Ltd's assets decreased $33,000, its liabilities decreased $41,000, its share capital increased $5,000, and Easy recorded net profit of $12,000. What was the amount of dividends declared?

Which of the following is not correct about the conceptual framework in accounting?

Identify the eight major components of the conceptual framework for accounting. Explain how these components interact with the demand for and supply of financial information.

What information does the income statement provide to users of financial information under the IFRS Framework?

Which qualitative characteristic of financial information alleviates "moral hazard"?

What standards are not contained in the CICA Handbook?

Maybel Company has a March 31, 2012 year end. Which of the following should not be recorded as a current liability?

Provide three reasons for the importance of the conceptual framework for financial reporting.

Which statement best describes a publicly accountable enterprise?

Which financial statement element is being described?

Which statement best describes a private enterprise?

Which concept of financial reporting is being described?

Which is a purpose of the conceptual framework in accounting?

Which is an assumption of financial information in the IFRS Framework?

Fundamentals of Financial Accounting Theory

Accrual Accounting

Revenue Recognition

Cash and Receivables

Inventories

Financial Assets

Property, Plant, and Equipment

Intangible Assets, Goodwill, Mineral Resources, and Government Grants

Applications of Fair Value to Non-Current Assets

Filters

Exam 2: Conceptual Frameworks for Financial Reporting

In which of the following transactions would it not be appropriate to recognize an asset in the financial statements?

Which statement is correct?

What decision would users of financial information not need to make under the IFRS Framework?

Discuss some of the conceptual framework concepts involved in determining whether to capitalize or expense an expenditure.

During the past year, Easy Supplies Ltd's assets decreased $33,000, its liabilities decreased $41,000, its share capital increased $5,000, and Easy recorded net profit of $12,000. What was the amount of dividends declared?

Which of the following is not correct about the conceptual framework in accounting?

Identify the eight major components of the conceptual framework for accounting. Explain how these components interact with the demand for and supply of financial information.

What information does the income statement provide to users of financial information under the IFRS Framework?

Which qualitative characteristic of financial information alleviates "moral hazard"?

What standards are not contained in the CICA Handbook?

Maybel Company has a March 31, 2012 year end. Which of the following should not be recorded as a current liability?

Provide three reasons for the importance of the conceptual framework for financial reporting.

Which statement best describes a publicly accountable enterprise?

Which financial statement element is being described?

Which statement best describes a private enterprise?

Which concept of financial reporting is being described?

Which is a purpose of the conceptual framework in accounting?

Which is an assumption of financial information in the IFRS Framework?

Fundamentals of Financial Accounting Theory

Accrual Accounting

Revenue Recognition

Cash and Receivables

Inventories

Financial Assets

Property, Plant, and Equipment

Intangible Assets, Goodwill, Mineral Resources, and Government Grants

Applications of Fair Value to Non-Current Assets

Filters