Question 1

The price on the sale of goods from one member of a corporate family to another is known as a ________.

Accepted Answer

A)  transfer price 
B)  sale/resale price 
C)  global price 
D)  multidomestic price 
A)  transfer price 
B)  sale/resale price 
C)  global price 
D)  multidomestic price

Question 2

Assume a U.S. company sells merchandise to a French customer for $200,000 when the exchange rate is $1.5 per euro. At the end of the month,the euro is trading at 1.47,and in the middle of the next month when payment is received,the exchange rate is 1.53. If the U.S. company receives payment in dollars,what is the value of the sale at the end of the month for the U.S. company?

Accepted Answer

A)  $200,000 
B)  $294,000 
C)  $300,000 
D)  $306,000 
A)  $200,000 
B)  $294,000 
C)  $300,000 
D)  $306,000

Question 3

According to the translation process in the United States,________.

Accepted Answer

A)  companies first translate their statements into dollars, and then recast their financial statements consistent with U.S. GAAP 
B)  companies recast their financial statements consistent with U.S. GAAP, and then translate them into U.S. dollars 
C)  companies only need to worry about the translation process because local operations take place in a local GAAP environment 
D)  companies translate foreign currency financial statements only if the dollar is weakening against the local currency 
A)  companies first translate their statements into dollars, and then recast their financial statements consistent with U.S. GAAP 
B)  companies recast their financial statements consistent with U.S. GAAP, and then translate them into U.S. dollars 
C)  companies only need to worry about the translation process because local operations take place in a local GAAP environment 
D)  companies translate foreign currency financial statements only if the dollar is weakening against the local currency

Question 4

In addition to hiding losses,Parmalat engaged in financial statement fraud to ________.

Accepted Answer

A)  pay shareholders 
B)  bribe government officials 
C)  support family-owned businesses 
D)  avoid paying high export/import tariffs 
A)  pay shareholders 
B)  bribe government officials 
C)  support family-owned businesses 
D)  avoid paying high export/import tariffs

Question 5

The translation method used when the functional currency is the parent currency is the ________.

Accepted Answer

A)  current-rate method 
B)  temporal method 
C)  translate-restate method 
D)  consolidation method 
A)  current-rate method 
B)  temporal method 
C)  translate-restate method 
D)  consolidation method

Question 6

The International Accounting Standards Board is composed of international securities regulators and is attempting to harmonize accounting standards through issuing International Financial Reporting Standards.

Accepted Answer

A) True 
 B)False

Question 7

In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?

Accepted Answer

Standard-setting in the United States de

Question 8

A typical U.S. company uses the following balance sheet format: assets = liabilities + shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 9

International accounting firms,such as Deloitte and KPMG,have the most influence on ________.

Accepted Answer

A)  international and domestic tax laws 
B)  public record disclosure rules 
C)  global auditing practices 
D)  domestic legal systems 
A)  international and domestic tax laws 
B)  public record disclosure rules 
C)  global auditing practices 
D)  domestic legal systems

Question 10

What is the role of the controller in an MNE? What are some of the challenges that a controller faces in an international environment?

Accepted Answer

The controller is responsible for provid

Question 11

Gavin Pharmaceuticals is a U.S.-based MNE. Which of the following is probably Gavin's most important metric when evaluating the firm's performance?

Accepted Answer

A)  foreign sales 
B)  market share 
C)  return on investment 
D)  sales revenue budget 
A)  foreign sales 
B)  market share 
C)  return on investment 
D)  sales revenue budget

Question 12

A major reason for the Parmalat accounting scandal is that the firm ________.

Accepted Answer

A)  sold milk in countries without a license 
B)  used U.S. GAAP standards instead of IFRS 
C)  used off-balance-sheet financing to hide debts 
D)  transferred most of its assets to banks in Switzerland 
A)  sold milk in countries without a license 
B)  used U.S. GAAP standards instead of IFRS 
C)  used off-balance-sheet financing to hide debts 
D)  transferred most of its assets to banks in Switzerland

Question 13

The process of combining financial statements of different subsidiaries into one statement is known as ________.

Accepted Answer

A)  conversion 
B)  translation 
C)  consolidation 
D)  recognition 
A)  conversion 
B)  translation 
C)  consolidation 
D)  recognition

Question 14

GAAP usage differences increases the problems associated with ________.

Accepted Answer

A)  trading foreign stock 
B)  establishing e-commerce 
C)  identifying emerging markets 
D)  raising capital in different countries 
A)  trading foreign stock 
B)  establishing e-commerce 
C)  identifying emerging markets 
D)  raising capital in different countries

Question 15

Which accounting systems are shaped more by government practice?

Accepted Answer

A)  macro-uniform accounting systems 
B)  micro-based systems 
C)  pragmatic business practice systems 
D)  business economic theory systems 
A)  macro-uniform accounting systems 
B)  micro-based systems 
C)  pragmatic business practice systems 
D)  business economic theory systems

Question 16

When using the current-rate method to translate foreign currency financial statements into the parent currency,translation gains and losses are recognized in comprehensive income.

Accepted Answer

A) True 
 B)False

Question 17

According to the accounting concept of mutual recognition,companies are required to reconcile financial statements to local GAAP.

Accepted Answer

A) True 
 B)False

Question 18

In a brief essay,discuss the concepts of transfer pricing and hedging.

Accepted Answer

An additional element of MNE management

Question 19

How do U.S. companies recognize transaction gains and losses in the financial statements?

Accepted Answer

A)  They are recognized as gains and losses in the income statement. 
B)  They are recognized as gains and losses in owners' equity. 
C)  Gains are recognized in the income statement, but losses are not. 
D)  Losses are recognized in the income statement, but gains are recognized in owners' equity. 
A)  They are recognized as gains and losses in the income statement. 
B)  They are recognized as gains and losses in owners' equity. 
C)  Gains are recognized in the income statement, but losses are not. 
D)  Losses are recognized in the income statement, but gains are recognized in owners' equity.

Question 20

An exchange rate variance results from ________.

Accepted Answer

A)  setting the budget at the actual exchange rate at that time and final performance at the rate used when the budget was set 
B)  translating the budget and actual performance at the forecasted exchange rate 
C)  translating the budget at the projected exchange rate and final results at the actual exchange rate 
D)  translating the budget using the current-rate method and actual results at the new current-rate method 
A)  setting the budget at the actual exchange rate at that time and final performance at the rate used when the budget was set 
B)  translating the budget and actual performance at the forecasted exchange rate 
C)  translating the budget at the projected exchange rate and final results at the actual exchange rate 
D)  translating the budget using the current-rate method and actual results at the new current-rate method

The price on the sale of goods from one member of a corporate family to another is known as a ________.

According to the translation process in the United States,________.

In addition to hiding losses,Parmalat engaged in financial statement fraud to ________.

The translation method used when the functional currency is the parent currency is the ________.

The International Accounting Standards Board is composed of international securities regulators and is attempting to harmonize accounting standards through issuing International Financial Reporting Standards.

In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?

A typical U.S. company uses the following balance sheet format: assets = liabilities + shareholders' equity.

International accounting firms,such as Deloitte and KPMG,have the most influence on ________.

What is the role of the controller in an MNE? What are some of the challenges that a controller faces in an international environment?

Gavin Pharmaceuticals is a U.S.-based MNE. Which of the following is probably Gavin's most important metric when evaluating the firm's performance?

A major reason for the Parmalat accounting scandal is that the firm ________.

The process of combining financial statements of different subsidiaries into one statement is known as ________.

GAAP usage differences increases the problems associated with ________.

Which accounting systems are shaped more by government practice?

When using the current-rate method to translate foreign currency financial statements into the parent currency,translation gains and losses are recognized in comprehensive income.

According to the accounting concept of mutual recognition,companies are required to reconcile financial statements to local GAAP.

In a brief essay,discuss the concepts of transfer pricing and hedging.

How do U.S. companies recognize transaction gains and losses in the financial statements?

An exchange rate variance results from ________.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

International Trade and Factor Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

The Multinational Finance Function

International Human Resources

Filters

Exam 18: International Accounting Issues

The price on the sale of goods from one member of a corporate family to another is known as a ________.

According to the translation process in the United States,________.

In addition to hiding losses,Parmalat engaged in financial statement fraud to ________.

The translation method used when the functional currency is the parent currency is the ________.

The International Accounting Standards Board is composed of international securities regulators and is attempting to harmonize accounting standards through issuing International Financial Reporting Standards.

In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?

A typical U.S. company uses the following balance sheet format: assets = liabilities + shareholders' equity.

International accounting firms,such as Deloitte and KPMG,have the most influence on ________.

What is the role of the controller in an MNE? What are some of the challenges that a controller faces in an international environment?

Gavin Pharmaceuticals is a U.S.-based MNE. Which of the following is probably Gavin's most important metric when evaluating the firm's performance?

A major reason for the Parmalat accounting scandal is that the firm ________.

The process of combining financial statements of different subsidiaries into one statement is known as ________.

GAAP usage differences increases the problems associated with ________.

Which accounting systems are shaped more by government practice?

When using the current-rate method to translate foreign currency financial statements into the parent currency,translation gains and losses are recognized in comprehensive income.

According to the accounting concept of mutual recognition,companies are required to reconcile financial statements to local GAAP.

In a brief essay,discuss the concepts of transfer pricing and hedging.

How do U.S. companies recognize transaction gains and losses in the financial statements?

An exchange rate variance results from ________.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

International Trade and Factor Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

The Multinational Finance Function

International Human Resources

Filters