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Chapter 1 Setting the Stage 1) Which of the following Canadian accounting standards are not included in the CICA Handbook? A) Publicly accountable enterprises B) Private enterprises C) Not-for-profit organizations D) Government Answer: D Type: MC Page Ref: 4 Difficulty: Easy 2) Which of the following financial reporting objectives is a user objective? A) Income tax deferral B) Net income maximization C) Cash flow prediction D) Income smoothing Answer: C Type: MC Page Ref: 5 Difficulty: Easy 3) Which financial reporting objective is common to both users and preparers of financial statements? A) Cash flow prediction B) Contract compliance C) Income tax deferral D) Net income maximization Answer: B Type: MC Page Ref: 5-7 Difficulty: Moderate 4) Which of the following financial statements would likely be the most effective in conveying information to users that will help them to predict the long-term future cash flows of the company? A) A classified balance sheet prepared under the accrual basis of accounting B) A proforma cash flow statement showing expected cash flows for the next year C) A multi-step income statement prepared under the accrual basis of accounting D) A cash flow statement showing cash flows for the past two year Answer: C Type: MC Page Ref: 5-6 Difficulty: Moderate
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