Exam 18: International Accounting Issues

U.S.-based MNEs are not permitted to set budgets and monitor results using the same exchange rate.

Garrison Industries,a global firm,provides financial information in its annual reports in more than one currency. Garrison Industries is most likely ________.

Consolidation of financial statements is the process of restating foreign subsidiary financial statements into the GAAP of the parent company.

Assume that a U.S.-based MNE has operations in Germany and that the revenues and expenses are mostly incurred in euros. Which translation method is the MNE most likely to use?

From an accounting perspective,countries with strong equity markets and shareholder orientations tend to be macro-uniform systems.

The accounting principle that relates to more,rather than less,extensive footnotes in reports is known as ________.

Larson Shoes is a British company. Which balance sheet format is most likely used by Larson?

According to the accounting concept of mutual recognition,________.

The most preferred exchange rate used by British MNEs to translate the budget is the ________.

Explain the difference between macro-uniform-based and micro-based accounting systems. What are some examples of countries that fit in each system?

From an accounting perspective,countries with strong equity markets and shareholder orientations tend to be ________.

Which of the following perspectives would LEAST likely be considered in a balanced scorecard?

Assume a U.S. company purchases equipment from a German supplier for €37,500 when the exchange rate at the time of the transaction is $1.5 per euro,or €0.667 per dollar. The U.S. company doesn't have to pay the German supplier until the end of the month,at which time the euro is now worth only $1.49 per euro or €0.671 per dollar. According to U.S. GAAP,the equipment would be valued at ________.

When using a budget for foreign operations,it is important for the parent company to select an exchange rate to set the budget and use that same rate to evaluate performance.

The balanced scorecard is ________.

What metrics are used to measure the performance of an MNE? How is the balanced scorecard approach unique?

Germany's accounting system has historically been a ________ system.

When recording the value of a purchase denominated in a foreign currency,the company is required to use the spot rate when payment is made as long as it is made 30 days or more in the future.

U.S.-based MNEs do not like to use the balanced scorecard for evaluation performance because it does not take into consideration international differences.

Which of the following is one of the benefits of using the balanced scorecard approach?