Researchers have found that dogs are capable of understanding up to 250 words and gestures, can count up to five and can perform simple mathematical calculations.
Using tests originally designed to demonstrate the development of language, pre-language and basic arithmetic in human children, the researchers were able to show that the average dog is far more intelligent than they are given credit for.
They have also compiled a list of the most intelligent and least intelligent breeds using information from obedience classes. Border collies and retrievers were rated among the most intelligent while hounds and terriers were the least bright.
"The average dog is about as bright linguistically as a human two-year-old," said Professor Stanley Coren, a leading expert on canine intelligence at the University of British Columbia in Vancouver who has carried out the work.
"This means they can understand about 165 words, signs and signals. Those in the top 20 per cent were able to understand as many as 250 words and signals, which is about the same as a two and a half year old.