fa4s04 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION...

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CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION September 2004 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 requested. 4. Assume a December 31 fiscal year-end unless specifically stated otherwise. 5. Assume all amounts are material unless directed otherwise. 6. Assume all companies are public companies unless otherwise noted. 7. Assume no companies use differential reporting unless otherwise noted. 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), 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. Marks will not be awarded for explanations. Note: 2 marks each a. Effective in 2002, the CICA Handbook now permits differential reporting for certain CICA Handbook sections. Which of the following best reflects differential reporting requirements? 1) Differential reporting is only permitted for publicly accountable enterprises. 2) The basis for differential reporting can be justified using the conservatism concept of the conceptual framework. 3) All alternatives selected in accordance with differential reporting must be fully disclosed in the financial statements. 4) Differential reporting affects most CICA Handbook sections. b. Which of the following is an example of an equity instrument per the CICA Handbook ? 1) A futures contract 2) Term preferred shares 3) A covered options security 4) A financial instrument representing a future obligation to issue preferred shares c. CD Company began business on January 1, 2003. It acquired a capital asset on January 1, 2003 for $25,000, and had accounting income for the year totalling $180,000. The CCA rate is 30% for the capital asset, with one-half deductible in the first year. The capital asset is amortized over 5 years on a straight-line basis, with no expected residual value. What would be the balance of future income taxes on the balance sheet as of December 31, 2003, if CD is subject to taxes at 40% per year? 1) $1,000 liability 2) $500 liability 3) $500 asset 4) $1,000 asset Continued. .. EFA4S04 ©CGA-Canada, 2004 Page 1 of 9
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d. The pooling of interests method has been subject to numerous criticisms. Which of the following is false regarding the pooling of interests method? 1) Pooling of interests ignores fair values in accounting for business combinations. 2) A criticism of pooling of interests is that there is rarely a true merger of equals when businesses
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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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fa4s04 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION...

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