Question 1

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 C

Question 2

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 B

Question 3

Financial statements typically include ________.

Accepted Answer

A) accompanying footnotes, a balance sheet, and a cash-flow statement 
B) translations into the languages of every country where the company lists shares 
C) different currency results to reflect the different countries where the company has investments or generates revenues 
D) different reports detailing the differences in generally accepted accounting principles used by the company in different countries 
A) accompanying footnotes, a balance sheet, and a cash-flow statement 
B) translations into the languages of every country where the company lists shares 
C) different currency results to reflect the different countries where the company has investments or generates revenues 
D) different reports detailing the differences in generally accepted accounting principles used by the company in different countries A

Question 4

________ is an important cash-management strategy that reduces transaction costs by coordinating cash inflows and outflows among subsidiaries.

Accepted Answer

A) Net present value 
B) Capital budgeting 
C) Forecasting 
D) Netting 
A) Net present value 
B) Capital budgeting 
C) Forecasting 
D) Netting

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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 7

How would you classify the accounting values of companies from the United States and the United Kingdom in terms of their measurement and disclosure of financial information?

Accepted Answer

A) secret and transparent 
B) transparent and optimistic 
C) secret and conservative 
D) conservative and optimistic 
A) secret and transparent 
B) transparent and optimistic 
C) secret and conservative 
D) conservative and optimistic

Question 8

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 9

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 10

Translation of foreign currency financial statements is best described as ________.

Accepted Answer

A) the process of restating foreign currency financial statements from one currency into another 
B) the process of combining financial statements of different subsidiaries into one statement 
C) the conversion of foreign currencies into the U.S. dollar 
D) easier when the foreign currency is the euro 
A) the process of restating foreign currency financial statements from one currency into another 
B) the process of combining financial statements of different subsidiaries into one statement 
C) the conversion of foreign currencies into the U.S. dollar 
D) easier when the foreign currency is the euro

Question 11

The United States should NOT be subject to IFRS for all of the following reasons EXCEPT ________.

Accepted Answer

A) the United States should have the most stringent reporting standards 
B) GAAP is less comprehensive than IFRS 
C) retraining would be necessary for publicly traded firms 
D) there is more than one set of IFRS 
A) the United States should have the most stringent reporting standards 
B) GAAP is less comprehensive than IFRS 
C) retraining would be necessary for publicly traded firms 
D) there is more than one set of IFRS

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) secrecy 
B) measurement 
C) conservatism 
D) transparency 
A) secrecy 
B) measurement 
C) conservatism 
D) transparency

Question 14

For U.S.companies, foreign-currency-denominated receivables and payables give rise to exchange gains and losses ________.

Accepted Answer

A) at the end of each accounting period 
B) only when the dollar strengthens against the foreign currency 
C) only when the dollar weakens against the foreign currency 
D) whether the transactions are denominated in dollars or the foreign currency 
A) at the end of each accounting period 
B) only when the dollar strengthens against the foreign currency 
C) only when the dollar weakens against the foreign currency 
D) whether the transactions are denominated in dollars or the foreign currency

Question 15

What are the four main ways that financial statements differ from country to country? What role has the IASB played in establishing global accounting standards?

Accepted Answer

Differences in language, currency, state

Question 16

According to the accounting concept of mutual recognition, ________.

Accepted Answer

A) companies are required to reconcile financial statements to local GAAP 
B) a country would accept financial statements of foreign companies prepared according to the GAAP of the foreign country if a company wanted to list its shares on that country's stock exchange 
C) companies would have to mutually agree to use GAAP issued by the IASB 
D) companies would have to recast their financial statements in terms of local GAAP 
A) companies are required to reconcile financial statements to local GAAP 
B) a country would accept financial statements of foreign companies prepared according to the GAAP of the foreign country if a company wanted to list its shares on that country's stock exchange 
C) companies would have to mutually agree to use GAAP issued by the IASB 
D) companies would have to recast their financial statements in terms of local GAAP

Question 17

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

Accepted Answer

A) True 
 B)False

Question 18

Compare the two major approaches used to translate foreign currency financial statements, and explain how translation gains and losses are reported under these two approaches.

Accepted Answer

Statement No.52 allows companies to use

Question 19

Cultural differences in accounting include all of the following EXCEPT ________.

Accepted Answer

A) secrecy 
B) transparency 
C) optimism 
D) language 
A) secrecy 
B) transparency 
C) optimism 
D) language

Question 20

A major force leading to the convergence of accounting standards is ________.

Accepted Answer

A) a shareholder orientation towards FDI 
B) the global separation of capital markets 
C) MNEs' needs for foreign capital 
D) pressures from the EU 
A) a shareholder orientation towards FDI 
B) the global separation of capital markets 
C) MNEs' needs for foreign capital 
D) pressures from the EU

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

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

Financial statements typically include ________.

________ is an important cash-management strategy that reduces transaction costs by coordinating cash inflows and outflows among subsidiaries.

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.

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

How would you classify the accounting values of companies from the United States and the United Kingdom in terms of their measurement and disclosure of financial information?

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

Translation of foreign currency financial statements is best described as ________.

The United States should NOT be subject to IFRS for all of the following reasons EXCEPT ________.

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

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

For U.S.companies, foreign-currency-denominated receivables and payables give rise to exchange gains and losses ________.

What are the four main ways that financial statements differ from country to country? What role has the IASB played in establishing global accounting standards?

According to the accounting concept of mutual recognition, ________.

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

Compare the two major approaches used to translate foreign currency financial statements, and explain how translation gains and losses are reported under these two approaches.

Cultural differences in accounting include all of the following EXCEPT ________.

A major force leading to the convergence of accounting standards is ________.

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

Global Capital Markets

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

International Human Resource Management

Filters

Exam 19: International Accounting and Finance Issues

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

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

Financial statements typically include ________.

________ is an important cash-management strategy that reduces transaction costs by coordinating cash inflows and outflows among subsidiaries.

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.

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

How would you classify the accounting values of companies from the United States and the United Kingdom in terms of their measurement and disclosure of financial information?

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

Translation of foreign currency financial statements is best described as ________.

The United States should NOT be subject to IFRS for all of the following reasons EXCEPT ________.

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

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

For U.S.companies, foreign-currency-denominated receivables and payables give rise to exchange gains and losses ________.

What are the four main ways that financial statements differ from country to country? What role has the IASB played in establishing global accounting standards?

According to the accounting concept of mutual recognition, ________.

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

Compare the two major approaches used to translate foreign currency financial statements, and explain how translation gains and losses are reported under these two approaches.

Cultural differences in accounting include all of the following EXCEPT ________.

A major force leading to the convergence of accounting standards is ________.

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

Global Capital Markets

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

International Human Resource Management

Filters