Chapter 3 MC Flashcards
Which of the following is correct?
a. In Canada, GAAP is contained in the Canadian Institute of Charted Accountants Handbook.
b. the differences between Canadian GAAP and American GAAP have become more important in the past two decades
c. Canadian GAAP is issued by the international accounting standards Board (IASB)
d. Canada has adopted US GAAP
a
What is the correct book entry when a firm increases its inventories by using its sound credit with the supplier?
a. credit inventories and debit cash
b. credit inventories and debit accounts payable
c. debit inventories and credit cash
d. debit inventories and credit accounts payable
d
The CICA handbook contains the accounting principles of:
a. Canada
b. the united states
c. all countries
d. Canada and the US
A
Which of the following is not a GAAP principle
a. the entity concept
b. a period of analysis
c. the idea that revenues must be matched against the costs that generated those revenues
d. the idea that revenues are only recognized when cash is collected
d
which of the following assets does not qualify for capital cost allowance (CCA)
a. land
b. manufacturing equipment
c. building
d. computer
a
which of the following is a source of cash inflows?
a. decrease of property, plant, and equipment
b. increase of accounts receivable
c. payment of dividends
d. decrease of accounts payable
a
which of the following is a non-cash item
a. receipt of dividends
b. payment of interest
c. amortization
d. purchase of inventory
c
which of the following equations represents free cash flow?
a. Net income + Depreciation + Deferred income taxes
b. Net income + Depreciation + Deferred income +/- change in working capital
c. Net income + Depreciation + Deferred income taxes +/- change in working capital - capital expenditures
d. Net income + Depreciation + Deferred income taxes +/- change in working capital - capital expenditures +/- financing cash flows
c
which of the following is not classified as cash flow from financing
a. issuance of long-term debt
b. repurchase of capital stock
c. payment of dividends
d. purchase of inventory
d
purchase of inventory is cash flow from operations ,not financing
which of the following is cash outflow?
a. decrease in inventories
b. decrease in accounts receivable
c. issue of common shares
d. decrease in accounts payable
d
remember that decrease(increases) of assets and increase (Decreases) of liabilities are cash inflows (cash outflows). only the decrease of accounts payable decrease cash flow
which of the following is not classified as cash flow from operations
a. issuance of long-term bonds
b. sale of goods
c. ; purchase of inventories
d. payment of employee salaries
a
which of the following is most likely to report non-controlling interest in its balance sheet? (non controlling interest is the portion of equity ownership in a subsidiary not attributable to the parent company, which has a controlling interest (greater than 50% but less than 100%) and consolidates the subsidiary’s financial results with its own)
a. a subsidiary firm
b. a firm that controls 2_% of another firm
c. a firm that controls 80% of another firm
d. government
c
which of the following is not a current asset?
a. cash
b. bonds
c. inventories
d. land
d
Capital gains occur in which of the following cases?
a. selling price of the asset initial cost of the asset
c. selling price of the asset Ending UCC
b
if the selling price is greater than the original capital cost, a capital gain arises
which of the following statements is false?
a. Canada operates a progressive personal tax system
b. when dividends are received, they are preferentially taxed
c. when interest is earned, it is fully taxable
d. Ontario residents and Quebec residents pay the same federal and provincial tax
d
the provincial tax rates and structures in Ontario and qubec are very different
