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Study Resources (Accounting)

Ex. 2-69Foundational accounting principles and qualitative characteristics –matching Listed below are several foundational accounting principles and qualitative characteristics. Match the letter of each with the appropriate phrase describing its application. Note that each itemmay be used more than once or not at all. a.Economic entity assumptiong.Matching principle b.Going concern assumptionh.Full disclosure principle c.Monetary unit.
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21.Equitable obligations arise due to a) statutory requirements. b) contractual obligations. c) moral or ethical considerations. d) union agreements. 22.Under IFRS, equity does NOT include a) long term leases. b) common and/or preferred shares. c) accumulated other comprehensive income. d) retained earnings. 23.Gains are defined as a) increases in economic resources resulting from an entity’s ordinary activities. b) decreases in economic resources.
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41.Fair value (of an asset) is a) an entry price. b) an entity-specific measure. c) an exit price. d) not used when following IFRS. 42.Application of the full disclosure principle a) is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. b) is violated when important financial information is buried in the.
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73.SAP R/3: A.operates on a mainframe environment with closed architecture. B.operates on a client-server environment with open architecture. C.operates on a client-server environment with closed architecture. D.operates on a mainframe environment with open architecture. 74.Y2K compatibility issues arose because: A.older computer systems recorded dates in mm/dd/yyyy formats and memory for these was expense. B.older computer systems recorded.
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Ex. 2-61Enhancing Qualitative Characteristics Although fundamental qualitative characteristics of relevance and reliability are considered most important, financial statement preparers also place value upon certain enhancing qualitative characteristics.Briefly describe each of these characteristics and their contribution to providing decision-useful accounting information. Ex. 2-62Accounting terminology – fill in the blanks Fill in the blanks below.
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11.Audited financial statements are prepared by a) auditors. b) financial analysts. c) Canada Revenue Agency. d) management. 12.The auditor’s primary responsibility is to a) review financial statements and discuss them with management. b) prepare financial statements. c) report to Canada Revenue Agency. d) report to standard setters. 13.The widely publicized subprime lending crisis was NOT caused by a) capital market participants.
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103.The advantages and disadvantages of modular implementation are: A.full system integration is available but hardware incompatibilities exist. B.installation and training is minimized but full system integration is not available. C.all employees are exposed to some portion of the ERP system but critical information is still in the legacy system. D.critical information is still available.
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1.Which of the following is NOT part of the conceptual framework for financial reporting? a) elements of financial statements b) qualitative characteristics of accounting information c) notes to financial statements d) foundationalprinciples 2.Which of the following is NOT an objective of financial reporting? a) to provide information about an entity’s economic resources, obligations and equity/net assets b).
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Ex. 2-71Matching concept A concept is a group of related ideas. Matching could be considered a concept because it includes ideas related to both revenue recognition and expense recognition. Briefly explain the theory behind a) revenue recognition and b) expense recognition. Ex. 2-72Forms of business organization Identify at least two (2) common forms.
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Ex. 2-67Identification of foundational accounting principles State the accounting principle or assumption that is most applicable in the following situations: 1.A company prepares consolidated financial statements for a subsidiary that it owns. 2.The decision to remove an asset from the balance sheet 3.A large sale on account is not recognized as revenue because collectability.
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Ex. 1-67Challenges facing financial reporting In North America, the financial reporting environment is changing at a very rapid pace. Briefly describe four challenges facing the accounting profession today. Ex. 1-68Role of executives and management in a post-SOX world SOX introduced sweeping changes to the institutional structure of the accounting profession.What key provision was.
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138.Which tier one company introduced the first ERP system that was “pure internet,” requiring no programming code to reside on the client computer? 139.Which of the tier one ERP companies is likely to provide the “best fit” for a manufacturing firm? For a human resources placement company? 140.Why is business process reengineering.
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51.Principles-based GAAP is sometimes criticized for being a) too inflexible. b) too flexible. c) too inconsistent. d) too difficult for the reader to understand. 52.Which of the following situations does NOT demonstrate an attempt at financial engineering? a) creating complex legal arrangements and financial instruments b) structuring debt financing so that it meets the GAAP definition of.
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158.Using an internet search engine, search for the terms “best of breed” + ERP. Locate information that addresses the debate/dilemma faced by many companies regarding the decision implementing best of breed technology versus new applications from an ERP vendor. Write a brief memo to discuss this issue. .
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TEXTBOOK – CHAPTER 15 – END OF CHAPTER QUESTIONS 112.              Which of the following advantages is least likely to be experienced by a company implementing an enterprise resource planning (ERP) system? A.Reduced cost B.Improved efficiency C.Broader access to information D.Reduced errors 113.An ERP system is a software system that provides each of the following except A.collection, processing,.
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Ex. 2-65Comprehensive Income Describe the income concept of comprehensive income.That is included in this notion of income under IFRS?What is included in it under ASPE? Ex. 2-66Foundational principles Briefly explain the foundational principles of recognition, measurement, presentation and disclosure that underlie financial accounting. .
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Ex. 2-77Fraudulent financial reporting and the accountant’s role Explain what the accountant’s responsibility is in preparation of a company’s financial records. Ex. 2-78Financial reporting pressures caused by budgets Explain why budgets might exert negative influence into accounting decisions.Offer some examples to illustrate where this might be the case. .
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127.What is an MRP II system and how is it different than the ERP systems in use today? 128.What are the two databases used by ERP systems? 129.Differentiate between the “enterprise-wide” and “non-volatile” features of a company’s data warehouse. 130.What was unique about SAP’s first ERP system? 131.Differentiate between the features of SAP’s R/1,.
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MULTIPLE CHOICE QUESTIONS 1.The essential characteristic(s) of accounting is (are) a) communication of financial information to interested internal parties only. b) communication of economic information to external parties. c) identification and measurement of financial information only. d) identification, measurement, and communication of financial information. 2.Financial accounting is concerned with the process that culminates in a) the preparation.
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83.Processes in supply chain management: 1.involve trading processes from a supplier to the business. 2.involve trading processes from the business to a customer. 3.involve trading between the business and other intermediaries. 4.do not include any transactions once raw materials are put into production. A.1, 2, 3, and 4 are all correct. B.1, 2, and 4 are.
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93.The advantage of “best of the breed” is: A.the best functionality of the ERP system as a result of total implementation. B.the best functionality of a unique process of the organization. C.best cost of implementation of the ERP system. D.total integration of the ERP modules 94.Business process reengineering (BPR): 1.aligns business processes with IT systems.
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MULTIPLE CHOICE–Conceptual 1.Which of the following statements is true regarding accounting information systems? a) Both large and small firms should use the same type of accounting system. b) All firmsshould have the same types of transactions. c) The volume of data to be handled should not vary between firms. d) The kind of information that.
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Ex. 2-63Equitable obligations Due to the current poor economic conditions, InfernoCorp, a medium-size manufacturer in Burnaby, is downsizing its Shipping Dept. and has to let go two of the employees, Chevronand Shell. Both are excellent workers and have been with the company for several years. The Shipping Dept. supervisor, Jo-Ann Roberts,.
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Ex. 2-73Control and the economic entity assumption Consolidated financial statements are prepared from the perspective of the economic entity.Determination of which business units, or subsidiaries, are to be included in the entity is rooted in the definition of control.Describe how this concept is interpreted under IFRS and ASPE, respectively.Discuss the significance.
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31.In Canada, the body which is NOT instrumental in the development of financial reporting standards is the a) Accounting Standards Board (AcSB). b) Financial Accounting Standards Board (FASB). c) International Accounting Standards Board (IASB). d) American Institute of Certified Public Accountants. 32.The adoption of International Financial Reporting Standards in Canada is an example of a) the.
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CHAPTER 15 – SHORT ANSWER QUESTIONS 124.              Describe how ERP systems enhance efficiency in a business organization. 125.Why is real-time processing essential in an ERP system? 126.How has ERP increased the responsibilities of customer service representatives? .
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156.Compare and contrast the functionality of the Logistics module and Supply Chain Management activities. 157.Suppose a company is experiencing problems with omitted transactions in the conversion processes: i.e., inventory transactions are not always being recorded as they occur. How can an ERP system help to alleviate such a problem? .
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Ex. 2-59Moral hazard In Chapter 1, the issue of information asymmetry, and the concept of moral hazard were introduced.Explain why the moral hazard issue is worse where some users (such as accountants and bankers) have expert knowledge. Ex. 2-60Materiality The concept of materiality if extremely important to the process of financial statement preparation.
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11.The overriding criterion by which accounting information can be judged is that of a) usefulness for decision making. b) freedom from bias. c) timeliness. d) comparability. 12.Which statement is correct regarding enhancing qualitative characteristics? a) Full discussion of the information presented is a substitute for comparable information. b) Numbers that are easily verifiable with a reasonable degree.
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147.Match the ERP modules on the left with the purpose of the related processes on the right: Financials a. Taking customer orders and preparing for the impending revenue and cash collection. Human Resources b. Maintenance of the general ledger and supporting journals and sub-ledgers. Procurement and Logistics c. Keeping track of purchasing and movement of.
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Ex. 1-65Professional judgement Explain the principle of professional judgement.When or why might it be necessary to employ professional judgement, even in a rules-based system? Ex. 1-66SOX and standard setting After several highly-publicized accounting scandals in the U.S. such as Enron, Sunbeam, and WorldCom, all of whom, coincidentally, were clients of the now basically.
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21.The “efficient markets hypothesis” proposes that a) market prices reflect information known only to internal stakeholders. b) market prices reflect all information about a company. c) market prices reflect information known only to external stakeholders. d) information asymmetry is required. 22.Which of the following does NOT describe a cause of management bias? a) the need to.
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31.When deciding whether to recognize a financial statement element (or not), and how to measure it, the accountant should a) always use estimates. b) record “hard” numbers and ignore “soft” numbers. c) determine an acceptable level of uncertainty. d) recognize a financial statement element even if it cannot be measured. 32.During the lifetime of an.
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Exercises Ex. 1-45Effective capital allocation Explain the advantages of an effective capital allocation process. Ex 1-46Financial statements in practice and theory What are the four most frequently provided financial statements?Provide two terminologies used to refer to each statement. Ex. 1-47Stakeholders in the financial reporting environment Briefly describe the much-publicized subprime lending crisis in the United States,.
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159.Using an internet search engine, search for the terms “big bang” + ERP. Identify at least one company that represents a success story with regard to this ERP implementation method (other than Marathon, as described in the Real World Example). Also identify at least one company that experienced problems with.
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Ex. 1-55Merits of accrual- vs. cash-basis accounting Investors are interested in assessing a company’s ability to generate net cash inflows, as well as its ability to protect and enhance capital investments.Briefly explain how each of the accrual- and cash-basis methods, respectively, might enhance these objectives. Ex. 1-56Information asymmetry In markets where information asymmetry.
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