Question 1: (Marks 2)

If cash flow prediction is a company's primary reporting objective, this would likely result in:

	Higher earnings.
	Lower earnings.
	Poor matching.
	Fewer accruals and deferrals.

Question 2: (Marks 2)

The organization created to develop accounting standards in Canada, the AcSB, is NOT concerned about:

	reported cash flows.
	reported earnings.
	reported comparability of results.
	reporting financial position.
	All of these answers are correct.

Question 3: (Marks 2)

Which of the following is published by the Accounting Standards Board (AcSB)?

	Accounting Project Proposals.
	Accounting Exposure Drafts.
	Accounting Issues Papers.
	CPA Handbook Sections and Accounting Guidelines.
	Statements of Auditing Revisions.

Question 4: (Marks 2)

Generally accepted accounting principles currently are promulgated primarily by the:

	Canadian Academic Accounting Association (CAAA).
	Canada Customs and Revenue Agency.
	Ontario Securities Commission (OSC).
	Accounting Standards Board (AcSB).

Question 5: (Marks 2)

The conceptual framework of accounting should have many positive effects as new accounting standards are developed. Which of the following is not one of those effects?

	Financial statements among companies and industries should be more consistent and comparable.
	Standard setting should be more consistent with an overall statement of the objectives and concepts of financial reporting.
	Users' understanding and confidence in financial statements should increase.
	Management should have greater latitude in choosing among accounting alternatives.
	Accountants should be better able to assess the validity of different accounting alternatives for similar and dissimilar transactions and events.

Question 6: (Marks 2)

External decision-makers include all of the following except:

	managers.
	owners.
	creditors.
	employees.

Question 7: (Marks 2)

The users toward which financial statements are directed:

	are very sophisticated and experienced in using financial information.
	are independent Public Accountants.
	have degrees in accounting and finance.
	have a reasonable understanding of business and economic activities.
	are Chartered Financial Analysts.

Question 8: (Marks 2)

General-purpose financial statements report financial information relevant to:

	investors only.
	creditors only.
	government users only.
	investors, creditors and government users.

Question 9: (Marks 2)

Users of financial statements can generally be broken down into which of the following two categories:

.

	Government and external users.
	Government and investors.
	Creditors and Investors.
	External users and preparers

Question 10: (Marks 2)

What is the purpose of financial statements?

	To disclose the market value of the firm's assets and liabilities.
	To determine compliance with tax laws.
	To identify shareholders.
	To help users make decisions.