fa4s02 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION...

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EFA4S02 ©CGA-Canada, 2002 Page 1 of 9 CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION September 2002 Marks Time: 4 Hours Notes: 1. All calculations must be shown in an orderly manner to obtain part marks. 2. Round all calculations to the nearest dollar. 3. Narratives for journal entries are not required unless specifically asked for. 4. Assume a December 31 fiscal year-end unless specifically stated otherwise. 5. Assume all amounts are material unless directed otherwise. 30 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if (1) is the best answer for item (a), then write (a) (1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. No account will be taken of any explanations you offer. Note 2 marks each a. Investors and creditors of profit-oriented organizations use financial information for assessing stewardship. Which of the following statements best describes the purpose of this assessment? 1) To predict the ability of the entity to earn income and generate cash flows 2) To evaluate how well the entity will be able to meet its obligations and generate a return on investment 3) To focus on how managers have improved the firm and its earnings 4) To assess how managers have cared for and maintained the assets in their custody b. Which of the following is the least important aspect of an accountant’s professional judgment? 1) It is derived from an individual’s knowledge and experience in his or her profession. 2) It changes over time, as the accountant matures and discovers new perspectives. 3) It entails the application of basic accounting concepts and principles. 4) It develops over time as a result of having to make difficult interpretations of financial information. c. Under section 3860 of the CICA Handbook on financial instruments, equity instruments include which of the following? 1) Non-compensatory stock option plans open to all employees 2) Term preferred shares 3) Instruments that represent a future obligation to issue preferred shares 4) Instruments that have fixed requirements for payment of dividends Continued. ..
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EFA4S02 ©CGA-Canada, 2002 Page 2 of 9 d. XYZ has a wholly-owned subsidiary, ABC. For which of the following activities would an accounting software program such as ACCPAC be most useful for XYZ and ABC? 1) For recording journal entries to track changes in XYZ’s “Investment in ABC” account using the equity method 2) For recording journal entries each year on the books of XYZ for its consolidation of the accounts of ABC 3) For preparing presentations for the board of directors on the results of the operations of XYZ and ABC 4) For preparing tax returns for the consolidated results of XYZ and ABC e. PQ Company issued 10-year convertible bonds with a face value of $500,000 and a stated annual interest rate of 8%, paid semi-annually. These bonds were issued for proceeds of $574,400, to provide
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This note was uploaded on 05/08/2010 for the course BUSINESS AIT 707 taught by Professor Raminrezaeinia during the Spring '09 term at Seneca.

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fa4s02 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION...

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