Question 1

Which of the following statements regarding inflation and accounting is false?

Accepted Answer

A)  The SEC requires U.S. companies to present supplemental financial information adjusted for the effects of inflation. 
B)  Instability of the measuring unit that is the currency occurs in countries with rampant inflation. 
C)  In some in Latin American and South American countries, companies have been required to adjust their financial statements to take into account the effects of inflation. 
D)  The FASB developed rules for companies in the United States to use to adjust for inflation. 
A)  The SEC requires U.S. companies to present supplemental financial information adjusted for the effects of inflation. 
B)  Instability of the measuring unit that is the currency occurs in countries with rampant inflation. 
C)  In some in Latin American and South American countries, companies have been required to adjust their financial statements to take into account the effects of inflation. 
D)  The FASB developed rules for companies in the United States to use to adjust for inflation.

Question 2

Essentially, the entire statement of financial position is inverted compared to what is commonly seen in the United States.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are among the most important reasons why accounting standards differ around the world except:

Accepted Answer

A)  differences in the state of economic development 
B)  differences in taxation 
C)  differences in inflation 
D)  differences in code law in all countries around the world 
A)  differences in the state of economic development 
B)  differences in taxation 
C)  differences in inflation 
D)  differences in code law in all countries around the world

Question 4

Which organization would have the ultimate responsibility of deciding if the advantages outweigh the disadvantages in the adoption of IFRS accounting standards in the U.S.?

Accepted Answer

A)  FASB 
B)  SEC 
C)  IASB 
D)  AICPA 
A)  FASB 
B)  SEC 
C)  IASB 
D)  AICPA

Question 5

Which of the following presents the proper ordering of assets, liabilities and equities on the statement of financial position used by some countries that is different from the U.S.?

Accepted Answer

A)  current assets, long-term assets, current liabilities 
B)  inventories, trade-receivables, cash 
C)  assets, liabilities, equities 
D)  current liabilities, long-term liabilities, equities 
A)  current assets, long-term assets, current liabilities 
B)  inventories, trade-receivables, cash 
C)  assets, liabilities, equities 
D)  current liabilities, long-term liabilities, equities

Question 6

The state of economic development can affect accounting standards.

Accepted Answer

A) True 
 B)False

Question 7

McDonald Corp. owns a building with an original cost of $2,000,000 and accumulated depreciation at the balance sheet date of $300,000. Based on a recent appraisal, the fair value of the building is $1,800,000.
REQUIRED:
1. At what amount will the building be reported on the year-end balance sheet if McDonald follows U.S. GAAP?
2. Does McDonald have a choice in the amount to report for the building if instead it follows IFRS? What are those choices?

Accepted Answer

1. $2,000,000 - $300,000 = $1,700,000.
2

Question 8

Which of the following statements is true regarding extraordinary items on the income statement?

Accepted Answer

A)  U.S. GAAP prohibits the presentation of extraordinary items on the income statement. 
B)  IFRS prohibits the presentation of extraordinary items on the income statement. 
C)  U.S. GAAP allows extraordinary gains and losses on the balance sheet. 
D)  IFRS allows the classification of gains and losses on the income statement as extraordinary as long as long as they are both unusual in nature and infrequent in occurrence. 
A)  U.S. GAAP prohibits the presentation of extraordinary items on the income statement. 
B)  IFRS prohibits the presentation of extraordinary items on the income statement. 
C)  U.S. GAAP allows extraordinary gains and losses on the balance sheet. 
D)  IFRS allows the classification of gains and losses on the income statement as extraordinary as long as long as they are both unusual in nature and infrequent in occurrence.

Question 9

No single explanation can be given for the divergence of accounting standards.

Accepted Answer

A) True 
 B)False

Question 10

When analyzing foreign statements, all of the following are accurate positions of non-current liabilities listings except:

Accepted Answer

A)  After current liabilities 
B)  Before current liabilities 
C)  After share capital 
D)  After total equity 
A)  After current liabilities 
B)  Before current liabilities 
C)  After share capital 
D)  After total equity

Question 11

During the most recent year, Grace paid $109,000 in interest to its lenders and $78,000 in dividends to its stockholders.
REQUIRED:
1. In which category of the statement of cash flows operating, investing, or financing should each of these amounts be shown if Grace follows U.S. GAAP? If more than one category is acceptable, indicate what the choices are.
2. In which category of the statement of cash flows operating, investing, or financing should each of these amounts be shown if Grace follows IFRS? If more than one category is acceptable, indicate what the choices are.

Accepted Answer

1. Under U.S. GAAP, the interest paid of

Question 12

In which of the following countries do significant differences exist between accounting income and taxable income?

Accepted Answer

A)  Japan 
B)  The United States 
C)  Germany 
D)  France 
A)  Japan 
B)  The United States 
C)  Germany 
D)  France

Question 13

How does the application of the lower-of-cost-or-market rule differ between U.S. GAAP and IFRS?

Accepted Answer

Both U.S. GAAP and IFRS require use of t

Question 14

Which of the following is a commonly cited disadvantage of having a new unified set of accounting standards?

Accepted Answer

A)  Acquiring foreign companies would become a more confusing proposition. 
B)  Corporations may find themselves more susceptible to lawsuits due to the principles-based system. 
C)  Time and money would not be saved in accessing capital markets abroad. 
D)  The SEC would be dissolved if international accounting standards were adopted. 
A)  Acquiring foreign companies would become a more confusing proposition. 
B)  Corporations may find themselves more susceptible to lawsuits due to the principles-based system. 
C)  Time and money would not be saved in accessing capital markets abroad. 
D)  The SEC would be dissolved if international accounting standards were adopted.

Question 15

Which of the following statements is false regarding the reasons for differing accounting systems around the world?

Accepted Answer

A)  Countries that have strong political and economic ties often share similar accounting practices. 
B)  Canada and Mexico, two former British colonies, can traced their accounting roots to those found in the United Kingdom. 
C)  The state of economic development typically mirrors the development stage of accounting rules in countries. 
D)  In some less-developed countries of the world, where the forces of capitalism are less prevalent, accounting standards have developed at a much slower pace than they have in more advanced economies. 
A)  Countries that have strong political and economic ties often share similar accounting practices. 
B)  Canada and Mexico, two former British colonies, can traced their accounting roots to those found in the United Kingdom. 
C)  The state of economic development typically mirrors the development stage of accounting rules in countries. 
D)  In some less-developed countries of the world, where the forces of capitalism are less prevalent, accounting standards have developed at a much slower pace than they have in more advanced economies.

Question 16

What is the name for the balance sheet under international accounting standards?

Accepted Answer

A)  Assets and Equity Attributable to Shareholders 
B)  Statement of Financial Position 
C)  Statement of Balance 
D)  The Equitable Claims Statement 
A)  Assets and Equity Attributable to Shareholders 
B)  Statement of Financial Position 
C)  Statement of Balance 
D)  The Equitable Claims Statement

Question 17

Significant differences exist in terms on financial statements around the world. For example, another name for what we know as Additional Paid-In Capital in the U.S. is:

Accepted Answer

A)  Share Capital 
B)  Capital Reserves 
C)  Provisions for Other Risks 
D)  Deferred Income 
A)  Share Capital 
B)  Capital Reserves 
C)  Provisions for Other Risks 
D)  Deferred Income

Question 18

Which of the following countries do not use a common law system?

Accepted Answer

A)  The United States 
B)  Germany 
C)  The United Kingdom 
D)  Both a and c are correct. 
A)  The United States 
B)  Germany 
C)  The United Kingdom 
D)  Both a and c are correct.

Question 19

Explain the meaning of the terms contingent liabilities and provisions as they relate to U.S. GAAP and IFRS?

Accepted Answer

Under U.S. GAAP, a contingent liability

Question 20

Which of the following is a true statement about the terms used on the balance sheet?

Accepted Answer

A)  U.S. GAAP requires a standard set of terms on the balance sheet. 
B)  IFRS requires a standard set of terms on the balance sheet. 
C)  Terminology is consistent across all countries. 
D)  Neither IFRS nor U.S. GAAP requires a standard set of terms on the balance sheet. 
A)  U.S. GAAP requires a standard set of terms on the balance sheet. 
B)  IFRS requires a standard set of terms on the balance sheet. 
C)  Terminology is consistent across all countries. 
D)  Neither IFRS nor U.S. GAAP requires a standard set of terms on the balance sheet.

Which of the following statements regarding inflation and accounting is false?

Essentially, the entire statement of financial position is inverted compared to what is commonly seen in the United States.

All of the following are among the most important reasons why accounting standards differ around the world except:

Which organization would have the ultimate responsibility of deciding if the advantages outweigh the disadvantages in the adoption of IFRS accounting standards in the U.S.?

Which of the following presents the proper ordering of assets, liabilities and equities on the statement of financial position used by some countries that is different from the U.S.?

The state of economic development can affect accounting standards.

Which of the following statements is true regarding extraordinary items on the income statement?

No single explanation can be given for the divergence of accounting standards.

When analyzing foreign statements, all of the following are accurate positions of non-current liabilities listings except:

In which of the following countries do significant differences exist between accounting income and taxable income?

How does the application of the lower-of-cost-or-market rule differ between U.S. GAAP and IFRS?

Which of the following is a commonly cited disadvantage of having a new unified set of accounting standards?

Which of the following statements is false regarding the reasons for differing accounting systems around the world?

What is the name for the balance sheet under international accounting standards?

Significant differences exist in terms on financial statements around the world. For example, another name for what we know as Additional Paid-In Capital in the U.S. is:

Which of the following countries do not use a common law system?

Explain the meaning of the terms contingent liabilities and provisions as they relate to U.S. GAAP and IFRS?

Which of the following is a true statement about the terms used on the balance sheet?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 14: International-Financial-Reporting-Standards

Which of the following statements regarding inflation and accounting is false?

Essentially, the entire statement of financial position is inverted compared to what is commonly seen in the United States.

All of the following are among the most important reasons why accounting standards differ around the world except:

Which organization would have the ultimate responsibility of deciding if the advantages outweigh the disadvantages in the adoption of IFRS accounting standards in the U.S.?

Which of the following presents the proper ordering of assets, liabilities and equities on the statement of financial position used by some countries that is different from the U.S.?

The state of economic development can affect accounting standards.

Which of the following statements is true regarding extraordinary items on the income statement?

No single explanation can be given for the divergence of accounting standards.

When analyzing foreign statements, all of the following are accurate positions of non-current liabilities listings except:

In which of the following countries do significant differences exist between accounting income and taxable income?

How does the application of the lower-of-cost-or-market rule differ between U.S. GAAP and IFRS?

Which of the following is a commonly cited disadvantage of having a new unified set of accounting standards?

Which of the following statements is false regarding the reasons for differing accounting systems around the world?

What is the name for the balance sheet under international accounting standards?

Significant differences exist in terms on financial statements around the world. For example, another name for what we know as Additional Paid-In Capital in the U.S. is:

Which of the following countries do not use a common law system?

Explain the meaning of the terms contingent liabilities and provisions as they relate to U.S. GAAP and IFRS?

Which of the following is a true statement about the terms used on the balance sheet?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters