If the Cost Method Is Used to Account for a Long-Term

question 74

Multiple Choice

If the cost method is used to account for a long-term investment in ordinary shares, dividends received should be

• A) credited to the Share Investments account.
• B) credited to the Dividend Revenue account.
• C) debited to the Share Investments account.
• D) recorded only when 20% or more of the shares are owned.

Distinguish between the financial reporting choices available to private enterprises in Canada.

Understand the assumptions underlying accounting principles such as the Historical Cost Principle.

Comprehend the definition and classification of different entities (public, private) under Canadian GAAP and their reporting requirements.

Understand the accounting and reporting requirements for small NFPOs under Section 4433.

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Definitions:

Work Shift

A period of time during which a group of workers performs their job duties at a company or workplace.

Electricity Costs

The amount incurred by a business or individual for the use of electricity over a specific time period.

Kilowatt-hour

A unit of energy measurement equivalent to one kilowatt of power expended for one hour of time, commonly used for billing electricity usage.

Straight-line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, representing the asset’s decrease in value over time.