ASPEs

Question 1

ASPE

Answer 1

(Accounting Standards for Private Enterprises) rules that Canadian companies that are privately owned can choose to follow instead of IFRS (starting Jan.1 2011)

Question 2

Business Entity Concept

Answer 2

long-standing principle which states that business & personal finance must be kept separately

Question 3

Cost Principle

Answer 3

requires accountants to record the value of assets at their original cost price (all purchases recorded at the original cost price)

Question 4

Continuing Concern Concept

Answer 4

• businesses are assumed to continue to operate unless it is known that it will not
• assets are worth to the business the amount they paid for (doesn’t change over time)

Question 5

Objectivity Principle

Answer 5

business transactions must be recorded based on facts (sourced documents) NOT opinion

Question 6

Revenue Recognition Principle

Answer 6

revenue is recorded WHEN goods or services have been provided (regardless of whether the customer has paid or not)

Question 7

Time Period Concept

Answer 7

financial statements are prepared for fiscal periods of equal length

Question 8

Matching Principle

Answer 8

expenses must be recorded in the fiscal period that they helped earn revenue for

Question 9

CICA

Answer 9

(Canadian Institute of Chartered Accountants) established the standards for Canadian accounts –> called generally sufficient accounting standards

Question 10

CICA Handbook

Answer 10

publication where most of the rules of accounting are found

Question 11

AcSB

Answer 11

(Accounting Standards Board) develop and establish standards for Canadian private business
- one separate governing body to oversee Canadian accounting practice

Question 12

IFRS

Answer 12

(International Financial Reporting Standards) international rules

• helps Canadian businesses communicate globally
• Canadian public companies started using it Jan 1, 2011

Question 13

IASB

Answer 13

(International Accounting Standards Board) organization that sets the accounting rules that Canadian companies that are public must follow

• independent not-for-profit organization that develops and establishes international financial reporting standards (IFRS) for the private sector
• consults with the AcSB

Question 14

Canadian GAAP

Answer 14

(Canadian Generally Accepted Accounting Principles) specific guidelines established by professional accountants to be followed in the preparation of accounting records and financial statements

• some were formal regulations and others described what has become common practice over the years
• most significant sections in the CICA Handbook