Exam 15: Accounting and Taxation in Global Business

A substantial difference between U.S. GAAP and IFRS concerns leases. Under U.S. GAAP, leases are classified as capital if one or more of the following criteria are met: title transfer, bargain purchase option, lease terms are equal to or greater than 90 percent of the asset's economic life, and if the minimum lease payments are greater than or equal to 40 percent of the asset's fair market value.

There are two major categories of auditing: _____ auditing and _____ auditing.

_____ pricing refers to the pricing of goods and services that are transferred (bought and sold)internally between members of a corporate family.

A(n)_____ answers the question: How much cash was taken in and paid out during the period?

Scenario - The Williams Company Based in South Dakota, USA, the Williams Company has been in operation since 1967. It has five branches located in China, Europe, South America, Mexico, and Canada. Its exquisite product line of fine custom-made jewelry is highly desired throughout the world. This company has maintained a very healthy balance sheet. The Williams Company is known within the industry for integrity and fair business practices. This company maintains an accounting system that is open for any stakeholder to view. It prides itself on being honest and trustworthy. The company feels it is this honesty in business practice that has led it to be a billion dollar organization. -If the company's stakeholders requested to be shown a financial statement that would identify the Williams Company's assets, liabilities, and equity for a given period of time, which one of the following statements would they most likely be requesting?

The primary external users of accounting information are goverment units, lenders, vendors, credit-rating agencies, stockholders, customers, and employees.

The ______ refers to the record that lists the balances of the asset, liability, and owners' equity accounts of a business on a specific date

______ of how money is spent by government organizations is of paramount importance to citizens who pay the taxes that support government operations.

Of the following, which is NOT one of the four financial statements that represent a business in financial terms?

_______ is an evaluation of a company's financial statements in order to identify significant trends or relationships among the items.

Briefly describe the most important reports produced by the accounting information system.

Describe the two parts of the accounting information system.

Internal audits are also called _____ audits.

______ refers to a statement that shows the beginning balance for retained earnings, additions and reductions to retained earnings, and the ending balance of retained earnings.

_____ has the highest federal corporate income tax rate.

Scenario - The Williams Company Based in South Dakota, USA, the Williams Company has been in operation since 1967. It has five branches located in China, Europe, South America, Mexico, and Canada. Its exquisite product line of fine custom-made jewelry is highly desired throughout the world. This company has maintained a very healthy balance sheet. The Williams Company is known within the industry for integrity and fair business practices. This company maintains an accounting system that is open for any stakeholder to view. It prides itself on being honest and trustworthy. The company feels it is this honesty in business practice that has led it to be a billion dollar organization. -The Williams Company places a high value on maintaining integrity in its operations. Part of ensuring this integrity is maintained involves having frequent audits of the company's accounting records performed. Which one of the following would not be considered an objective of a financial statement audit?

A typical AIS has two principal objectives: (1)to provide all the financial information internally needed by management for business decision-making, known as management accounting; and (2)to provide financial information to various external users concerned with the financial activities of the organization, known as financial accounting.

Statement that summarizes the revenues earned and the expenses incurred by a business over a period of time is called the ______.

"Unfortunately, auditing is not necessary for effective financial reporting." Do you agree with this statement? Defend your position.

The ______ refers to a system which has two principal objectives: (1)to provide all the financial information needed internally by management for business decision making, known as management accounting, and (2)to provide financial information to various external users concerned with the financial activities of the organization, known as financial accounting.