PLEASE RESPOND ASAP.

2.

Merch Ltd. acquired 65 percent of Trendy Caps Ltd. several years ago. In the current year, Merch sold five percent of its interest in Trendy for $100,000. The $100,000 should appear on Merch's consolidated statement of cash flows under

• a. investing activities.
• b. financing activities.
• c. operating activities.
• d. other activities.

3.

In joint operations, the operators usually agree

• a. to treat the joint operations as a partnership for legal purposes.
• b. to specify that title to the assets provided by the operators must be transferred to the joint operations.
• c. to specify the assets that each operator retains the rights to.
• d. to indicate that all assets and liabilities are shared equally by the operators.

4.

which of the following is NOT an indicator used in determining the functional currency?

a. investments

b. operating surpluses

c. financing

d. operating costs

5.

Which of the following is a non-monetary item?

a. accounts receivable

b. accounts payable

c. pension liabilities to be paid in cash

d. prepaid rent

6.

A Canadian company has a foreign currency denominated receivable. What will occur if the company does not establish a hedge and the foreign currency strengthens relative to the Canadian dollar?

a. There is no effect.

b. A gain would occur.

c. A loss would occur.

d. There is insufficient information provided to determine whether there is any effect.

7.

Which of the following statements is TRUE about hedge accounting?

a. New requirements for hedge accounting under IFS 9 (Financial Instruments) are much more restrictive than previous requirements under IAS 39 (Financial Instruments).

b. Hedge accounting must be used if a fair value hedge has been established.

c. Hedge accounting must be used if a cash-flow hedge has been established.

d. Hedge accounting is an option, not a requirement.

8.

For speculative forward contracts, exchange gains and losses are recognized in profit

a. every time the exchange rate changes.

b. at the end of each fiscal year.

c. at the end of the contract.

d. at the end of each quarter.

9.

______exposure exists when assets translated at the forward exchange rate are larger than liabilities translated at the forward exchange rate.

a. Accounting

b. Economic

c. Transaction

d. Net asset

10

Under the presentation currency translation method, which item is NOT translated at the historical rate?

a. revenues

b. deferred revenues

c. depreciation

d. common shares

11

When a foreign currency weakens against the domestic currency, what effect will there be on financial statements translated using the ()? functional currency translation method (FCT) and on financial statements translated using the presentation currency translation method

a. FCT will result in foreign exchange gains and PCT will result in foreign exchange losses.

b. FCT will result in foreign exchange losses and PCT will result in foreign exchange gains.

c. Both FCT and PCT will result in foreign exchange losses.

d. Both FCT and PCT will result in foreign exchange gains.

12

Under ASPE, the presentation currency translation method (allowed under IFS) is referred to as the

a. self-sustaining method.

b. integrated method.

c. current rate method.

d. temporal method.

13

Under Section 4400 of the Handbook (Financial Statement Presentation for Not-For-Profit Organizations), which of the following is NOT a category under net assets on the statement of financial position?

a. unrestricted net assets

b. other net assets

c. internally and externally restricted net assets

d. net assets maintained permanently in endowments

14

Internally imposed restrictions (e.g., by the board of directors) on contributions received by a not-for-profit organization are referred to as

a. endowment contributions.

b. restricted contributions.

c. designated funds.

d. reserves.

15

Meals for You is a not-for-profit organization that prepares and delivers meals to senior citizens. As a small NFPO, it chose to expense its capital assets when it acquired them. Meals for You now has average revenues in excess of $500,000. Meals for You

a. needs to start capitalizing its capital assets, but it is not necessary to amortize them.

b. does not have to change its capital asset policy.

c. needs to capitalize and amortize its capital assets and apply this policy prospectively.

d. needs to capitalize and amortize its capital assets and apply this policy retroactively.

16

Ethan's House, a not-for-profit organization, received a large donation. The donor did not restrict the donation, but the board of directors has imposed restrictions on what the donation can be used for. Under the restricted fund method, this donation should be initially recorded as

a. deferred revenue.

b. a change to net assets.

c. revenue in the general fund.

d. revenue in the restricted fund.

17

When John was cleaning out his late uncle's property, he discovered several large display cases that his uncle had used in his shop. John donated them to the Northern Historical Society. The Society had no use for the display cases but thought that it could sell them at a future date to raise some money. The Society should

a. record the cases as other assets.

b. record the cases as capital assets.

c. disclose the existence of the cases in the notes to the financial statements.

d. not record or disclose the cases in the financial statements.

18

Under the restricted fund method, where does cash paid out for fundraising expenditures appear on the statement of cash flows? (The goal of the fundraiser was to raise sufficient funds to keep the NFPO running for the next year.)

a. under investing activities

b. under financing activities

c. under operating activities

d. does not appear on the statement of cash flows

20

Boychuk Ltd. acquired 65 percent of Flute Ltd.'s common shares and 65 percent of its preferred shares. Boychuk reports under ASPE and has opted not to present consolidated financial statements. The preferred shares are traded on a provincial stock exchange. Boychuk should report its investment in Flute's preferred shares at

a. cost less any impairment losses, and these losses should be reported in net income.

b. fair value, and any adjustments to fair value should be reported in net income.

c. fair value, and any adjustments to fair value should be reported in contributed surplus.

d. cost at the time of acquisition.