1. According to the existing IFRS and the CICA Handbook Part II guidelines, which of the following is not an essential characteristic of a liability?

A) It embodies a duty or responsibility.

B) The transaction or event that obliges the entity has occurred.

C) The obligation is enforceable on the other party.

D) The entity has little or no discretion to avoid the duty.

2. Corporation income taxes payable

A) Must always be approved by an external auditor.

B) Are reviewed and approved by Canada Revenue Agency (CRA).

C) Also apply to proprietorships and partnerships.

D) Are always the same under GAAP and Canadian tax laws.

3. The liability of shareholders is

A) Similar to the liability of the owners of a partnership.

B) Similar to the liability of the owner of a proprietorship.

C) Equal to an amount sufficient to satisfy all creditors.

D) Limited to their property or service invested in the corporation.