fa4j07 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION June...

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EFA4J07 ©CGA-Canada, 2007 Page 1 of 9 CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION June 2007 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 the best answer for item (a) is (1), 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. In order to attain the qualitative characteristic of relevance, financial information should meet which of the following criteria? 1) Representational faithfulness 2) Verifiability 3) Comparability 4) Timeliness b. Which of the following is considered a primary source of generally accepted accounting principles in Canada? 1) Abstracts of issues discussed by the CICA’s Emerging Issues Committee 2) Pronouncements made by the International Accounting Standards Board 3) Approved drafts of exposure drafts issued for comment by the CICA 4) Accounting textbooks for areas where the CICA Handbook does not provide any guidance c. New CICA Handbook sections require separate disclosure of other comprehensive income. Which of the following types of gains are not required to be included in other comprehensive income? 1) Gains from translation of the financial statements of a self-sustaining foreign operation 2) Gains from changes in fair value of available-for-sale securities 3) Gains from cash flow hedging instruments 4) Gains from held-for-trading securities Continued. ..
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EFA4J07 ©CGA-Canada, 2007 Page 2 of 9 d. On December 31, 2005, TV Company purchased $40,000 (nominal value) 5% bonds at a cost of $44,000. On December 31, 2006, the fair value of the bonds was $46,000. Which of the following statements is true regarding these bonds? 1) If the bonds are classified as held-for-trading, a remeasurement gain will be included in other comprehensive income. 2) If the bonds are classified as held-to-maturity, a remeasurement gain will be included in net income. 3) If the bonds are classified as available-for-sale, a remeasurement gain will be included in other comprehensive income. 4)
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fa4j07 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION June...

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